The Wind Point sell-side lens — what reaches the owner: normalized earnings, the equity bridge, deleveraging, and what blocks a clean sale.
At a 14× exit, run-rate EBITDA of $127M frames an $3.0B enterprise value and $2.1B of proceeds — a 4.0× MOIC. The $35M run-rate-vs-reported gap is worth $490M of EV, so make the QoE bridge diligence-proof and clear the Normalized run-rate EBITDA defensible block before the dataroom opens.
4 of 4 headline metrics improving vs prior · still off target: Adjusted EBITDA $116M vs $120M, Net Debt / EBITDA 4.2x vs 4.0x, Free Cash Flow $48M vs $55M
Move to credit hold pending paydown; reforecast ARR net of likely churn.
Distress filings + overdue AR; churn risk High on $6.4M account.
Sets deal capacity and refinancing risk.
A buyer underwrites run-rate, not reported — at 14× that $35M gap is worth $490M of enterprise value.
The lowest-% dataroom item is the top exit risk: Bridge built; unbanked synergy needs support.
The cockpit is strong day-to-day — but this is the exit lens. It cuts through to what an exit actually turns on: debt, normalized earnings, the equity proceeds that reach Wind Point, and the diligence items that block a clean sale. At a 14× exit, run-rate EBITDA of $127Mand $510M of gross debt frame the whole conversation.
Reported → add-backs → Adjusted → unbanked synergy → annualize → leakage → Run-rate normalized.
So what: a buyer underwrites run-rate, not reported — the gap is $35M of EBITDA. At the 14× exit multiple that gap is worth $490M of enterprise value, which is exactly why the QoE bridge has to be defensible.
Exit EV → less net debt → less fees → Equity value → less mgmt rollover → Proceeds to Wind Point.
MOIC: against an assumed $520M of invested equity, $2.1B of proceeds is a 4.0× MOIC. Net debt and fees take $467M off the top; management rollover takes the rest of the gap to gross EV — the bridge is what turns a headline multiple into real cash to the fund.
Quarterly FCF sweep pays down the term loan; EBITDA growth does the rest. Covenant is 5.5×.
| Period | Beg debt | FCF sweep | End debt | EBITDA | Leverage | Kind |
|---|---|---|---|---|---|---|
| Q2 FY26 (act) | $505M | −$18M | $487M | $116M | 4.20× | Actual |
| Q3 FY26 | $487M | −$16M | $471M | $122M | 3.86× | Forecast |
| Q4 FY26 | $471M | −$21M | $450M | $129M | 3.49× | Forecast |
| Q1 FY27 | $450M | −$17M | $433M | $136M | 3.18× | Forecast |
| Q2 FY27 | $433M | −$19M | $414M | $143M | 2.90× | Forecast |
| Exit FY27 | $414M | −$22M | $392M | $150M | 2.61× | Forecast |
First-lien term loan dominates; revolver headroom and seller notes round out the structure.
| Tranche | Kind | Balance | Rate | Maturity | Note |
|---|---|---|---|---|---|
| First-lien Term Loan B | Term | $415M | SOFR + 475 (≈9.6%) | 2028-06 | Covenant-lite; springing leverage 5.5x on revolver draw. |
| Revolving credit facility | Revolver | $60M | SOFR + 400 | 2027-06 | $150M facility; $90M undrawn = liquidity. |
| Seller notes / earnouts | Seller | $22M | 6.0% fixed | 2026-2027 | Deferred consideration on RFI/ECD tied to synergy capture. |
| Finance leases (fleet/RE) | Lease | $13M | ≈7% | rolling | Fleet + office leases. |
Net revenue retention dips at year 1 on integration, then recovers on platform cross-sell.
| Cohort | Acquired | NRR at acq | NRR yr 1 (dip) | NRR now | Yr-1 churn | Note |
|---|---|---|---|---|---|---|
| Firecom | 2021 | 98% | 95% | 111% | 9% | Integrated; cross-sell drove recovery above 110. |
| DavEd Fire Systems | 2021 | 97% | 96% | 109% | 8% | Stable base; ITM attach lifted expansion. |
| AFA Protective Systems | 2022 | 99% | 94% | 108% | 11% | Early dip on rebranding; now expanding. |
| RFI Enterprises | 2023 | 96% | 92% | 103% | 12% | Mid-recovery; ERP cutover disruption tail. |
| Integrated Security & Comms (ISC) | 2024 | 95% | 90% | 96% | 14% | In the trough — integration churn not yet offset. |
| Signet | 2024 | 94% | 91% | 95% | 13% | Earliest; watch the base through cutover. |
Integration dips the base in year one, then platform cross-sell recovers it above 105 — except ISC and Signet, still in the trough and the one soft spot a buyer will probe in the recurring-revenue pack.
The top exit risk is the lowest-% item — Normalized run-rate EBITDA defensible (70%): Bridge built; unbanked synergy needs support.