DC

Tactical Technologies XYZ

Click here to return home

Tactical Technologies XYZ is a hypothetical DOD government contractor based on a prior Raymond James Defense & Government Services client. The models are based on financial statements that resemble the actual client but have been modified to protect the confidentiality of the prior client. The company sought financial representation to explore potential acquisition opportunities, and I was hypothetically presenting to the company's management to secure the engagement. I developed a financial model and discussion materials that could accurately position Tactical Tech to maximize value, considering market dynamics and their competitive advantages.

Tactical Technologies XYZ is a defense technology company specializing in training and battle management solutions for government and military clients. The company has a proven track record of supporting Special Operations Forces (SOF) and has established a global footprint with extensive capabilities in delivering complex defense programs. Tactical Tech is known for leveraging innovative technologies such as virtual reality and artificial intelligence to enhance the effectiveness of its training programs. With strong contract growth and a highly skilled workforce, the company is well-positioned for future expansion.

  1. Year-over-year revenue growth: 8%
  2. COGS: 68% of revenue
  3. SG&A: 18% of revenue
  4. CapEx: 1.5% of revenue
  5. Consistent working capital requirements
  1. Terminal growth rate (TGR): 2.5%
  2. Terminal EBITDA multiple: 7x, 8x, and 9x
  3. SG&Risk-free rate: 3%
  4. Equity size premium: 6%
  5. Market risk premium: 4.42%
  6. Cost of debt: 5%
  1. Target IRR: 20%
  2. Entry Multiple: 8x
  3. SG&Senior Debt: 2.5x EBITDA, 6.5% interest
  4. Sub Debt: 1.5x EBITDA, 12% interest
  5. Rollover Equity: 25%
  6. Deal Fees: $3M
Download Materials
Download Spreadsheet