Deal Lab · Buyout model 1.0
Anglo American plc Buyout Model
A buyout of Anglo American plc on its published figures for fiscal 2025, in US dollars: revenue flat, the margin and the shares of revenue of that period, entry and exit at 10.0x EBITDA, exit after 5 years.
Returns
Internal rate of return
−23.9%
Multiple of money
0.26x
Sponsor's equity
$13.6bn
Enterprise value
$36.5bn
Proceeds at exit
$3.5bn
Sources and Uses
| Uses | Amount |
|---|---|
| Equity price | $21.3bn |
| Borrowings refinanced | $15.5bn |
| Transaction costs | $731m |
| Financing fees | $365m |
| Minimum cash | $371m |
| Uses | $38.3bn |
| Sources | Amount |
|---|---|
| Senior loan | $13.7bn |
| Subordinated notes | $4.6bn |
| Cash of the company | $6.4bn |
| Sponsor's equity | $13.6bn |
| Sources | $38.3bn |
Projection
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Revenue | $18.5bn | $18.5bn | $18.5bn | $18.5bn | $18.5bn | $18.5bn |
| EBITDA of the case | $3.7bn | $3.7bn | $3.7bn | $3.7bn | $3.7bn | $3.7bn |
| Cash cost of leases | $287m | $287m | $287m | $287m | $287m | $287m |
| Depreciation and amortisation | $2.3bn | $2.3bn | $2.3bn | $2.3bn | $2.3bn | |
| Capital expenditure | $3.6bn | $3.6bn | $3.6bn | $3.6bn | $3.6bn | |
| Increase in working capital | $0 | $0 | $0 | $0 | $0 | |
| Interest | $1.5bn | $1.6bn | $1.7bn | $1.7bn | $1.7bn | |
| Tax | $0 | $0 | $0 | $0 | $0 | |
| Cash available for debt service | −$189m | −$189m | −$189m | −$189m | −$189m |
Debt Schedule
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Senior loan | $13.7bn | $13.6bn | $13.4bn | $13.3bn | $13.2bn | $13.0bn |
| Subordinated notes | $4.6bn | $4.6bn | $4.6bn | $4.6bn | $4.6bn | $4.6bn |
| Revolving facility | $0 | $1.8bn | $3.7bn | $3.7bn | $3.7bn | $3.7bn |
| Cash | $371m | $371m | $336m | −$1.7bn | −$3.7bn | −$5.7bn |
| Debt to EBITDA | 5.00x | 5.45x | 5.92x | 5.89x | 5.85x | 5.81x |
| EBITDA to interest | 2.50x | 2.32x | 2.16x | 2.17x | 2.18x |
Covenants and the Credit View
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Limit of debt to EBITDA | 6.50x | |||||
| Lease-adjusted debt to EBITDA | 5.00x | 5.45x | 5.92x | 5.89x | 5.85x | 5.81x |
| Band of debt to EBITDA | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged |
Return Bridge
| Amount | |
|---|---|
| Sponsor's equity | $13.6bn |
| EBITDA growth | $0 |
| Change of multiple | $0 |
| Net debt repaid | −$9.0bn |
| Non-controlling interests | $0 |
| Costs at closing | −$1.1bn |
| Management and limited liability | $0 |
| Proceeds at exit | $3.5bn |
Sensitivity Tables
| Entry by exit | 8.00x | 9.00x | 10.0x | 11.0x | 12.0x |
|---|---|---|---|---|---|
| 8.00x | −100% | −34.2% | −8.1% | 3.5% | 11.5% |
| 9.00x | −100% | −100% | −18.9% | −6.3% | 1.8% |
| 10.0x | −100% | −100% | −23.9% | −12.1% | −4.5% |
| 11.0x | −100% | −100% | −27.5% | −16.3% | −9.1% |
| 12.0x | −100% | −100% | −30.3% | −19.5% | −12.5% |
| Debt by growth | −4.0% | −2.0% | 0.0% | 2.0% | 4.0% |
|---|---|---|---|---|---|
| 4.00x | −27.4% | −19.2% | −13.0% | −7.9% | −3.5% |
| 4.50x | −43.2% | −26.2% | −17.1% | −10.3% | −4.8% |
| 5.00x | −100% | −43.4% | −23.9% | −14.1% | −6.9% |
| 5.50x | −100% | −100% | −40.1% | −20.2% | −10.0% |
| 6.00x | −100% | −100% | −100% | −34.0% | −15.2% |
Solvers
Highest entry multiple for a return of 20.0%
n/a
No entry multiple reaches the target
Revenue growth a year for a return of 20.0%
16.1%
The target return
Debt capacity at closing, times EBITDA
n/a
The covenants fail without new debt
Assumptions and Their Origins
| Group | Assumption | Value | Origin |
|---|---|---|---|
| Transaction | Entry multiple | 10.0x | Convention of buyout 1.0 |
| Transaction | Years to exit | 5 years | Convention of buyout 1.0 |
| Transaction | Transaction costs | 2.0% | Convention of buyout 1.0 |
| Transaction | Financing fees | 2.0% | Convention of buyout 1.0 |
| Transaction | Minimum cash, of revenue | 2.0% | Convention of buyout 1.0 |
| Financing | Debt at closing, times EBITDA | 5.00x | Convention of buyout 1.0 |
| Financing | Debt at most, of the enterprise value | 60.0% | Convention of buyout 1.0 |
| Financing | Senior loan, of the new debt | 75.0% | Convention of buyout 1.0 |
| Financing | Senior loan repaid each year | 1.0% | Convention of buyout 1.0 |
| Financing | Cash sweep | 100% | Convention of buyout 1.0 |
| Financing | Revolving facility, times EBITDA | 1.00x | Convention of buyout 1.0 |
| Financing | Base rate | 3.9% | Policy rate of the United States, BIS central bank policy rates, 20 October 2026 |
| Financing | Senior loan spread | 3.5% | Convention of buyout 1.0 |
| Financing | Subordinated notes spread | 6.0% | Convention of buyout 1.0 |
| Financing | Revolving facility spread | 3.0% | Convention of buyout 1.0 |
| Financing | Covenant headroom on debt to EBITDA | 30.0% | Convention of buyout 1.0 |
| Financing | Minimum EBITDA to interest | 2.00x | Convention of buyout 1.0 |
| Operations | Revenue growth a year | 0.0% | Convention of buyout 1.0 |
| Operations | EBITDA margin | 19.7% | EBITDA over revenue, fiscal 2025 |
| Operations | Cash cost of leases, of revenue | 1.5% | Cash cost of leases over revenue, fiscal 2025 |
| Operations | Depreciation and amortisation, of revenue | 12.4% | Depreciation and amortisation over revenue, fiscal 2025 |
| Operations | Capital expenditure, of revenue | 19.2% | Median capital expenditure over revenue, fiscal 2023 to 2025 |
| Operations | Working capital, of revenue | 10.1% | Working capital over revenue, end of the fiscal 2025 |
| Operations | Leases as debt | Yes | Leases as debt, the basis of the credit metrics |
| Operations | Share-based pay added back | No | Convention of buyout 1.0 |
| Taxes | Tax rate | 25.0% | Combined statutory rate of corporate income tax of the United Kingdom, OECD Corporate Tax Statistics, 2026 |
| Taxes | Interest deducted up to 30% of EBITDA | No | Convention of buyout 1.0 |
| Exit | Exit multiple | 10.0x | Convention of buyout 1.0 |
| Exit | Management share of the proceeds | 0.0% | Convention of buyout 1.0 |
| Exit | Target return | 20.0% | Convention of buyout 1.0 |
Inputs and Their Documents
Published figures of fiscal 2025, each with the documents it comes from.
| Input | Value | Method | Documents |
|---|---|---|---|
| Adjusted EBITDA | $3.8bn | Adjusted EBITDA of the company page | Annual financial report 2025-12 |
| Share-based pay | $129m | Share-based pay that adjusted EBITDA adds back | Annual financial report 2025-12 |
| EBITDA after share-based pay | $3.7bn | Adjusted EBITDA less share-based pay | Annual financial report 2025-12 |
| Depreciation and amortisation | $2.3bn | Depreciation and amortisation of adjusted EBITDA | Annual financial report 2025-12 |
| Revenue | $18.5bn | Revenue of the base period | Annual financial report 2025-12 |
| Borrowings | $15.5bn | Total debt less lease liabilities | Annual financial report 2025-12 |
| Lease liabilities | $0 | Lease liabilities | Annual financial report 2025-12 |
| Cash and short-term investments | $6.4bn | Cash and short-term investments | Annual financial report 2025-12 |
| Non-controlling interests | $6.1bn | Non-controlling interests | Annual financial report 2025-12 |
| Receivables | $3.7bn | Receivables | Annual financial report 2025-12 |
| Payables | $4.9bn | Payables | Annual financial report 2025-12 |
| Inventories | $3.0bn | Inventories | Annual financial report 2025-12 |
| Payments of lease liabilities | $287m | Payments of lease liabilities | Annual financial report 2025-12 |
| Interest on lease liabilities | $0 est. | Interest on lease liabilities at the average rate of finance costs on total debt | Annual financial report 2025-12 |
| Capital expenditure | $3.3bn | Capital expenditure of the latest fiscal year | Annual financial report 2025-12 |
Checks of the Model
- Sources equal uses
- The equity price is above nil
- The sponsor's equity is above nil
- Each balance of debt stays between nil and its amount at closing
- Cash is the cash of the year before and the cash flow of the year
- Cash stays at the minimum unless a shortfall is stated
- The 6 parts of the bridge add up to the proceeds less the sponsor's equity
- The cash flows at the internal rate of return have a present value of nil
Deal Lab computes arithmetic on published figures and on the assumptions of the user. It values no company, recommends no transaction and forecasts no result.