UPLEVERED / DEAL ROOM SIMULATION / CALDER

Calder Industrial Supply.
Your recommendation is due.

The seller wants $25 million. Set your opening price, then revisit the deal when the diligence records disagree.

Acquisition practice for searchers and junior PE and corporate-development professionals.

Detailed schedules use USD thousands ($000); enter calculations in USD millions ($m). Your opening call is preserved. Answers stay in this browser tab and are not sent to UpLevered. Prepare a decision record to keep your work.

Your role: as a searcher, act as the acquisition principal presenting to capital partners. As a junior PE professional, prepare the investment-team recommendation. In corporate development, assess a standalone acquisition under the same capital limits, with no assumed synergies. The $12m equity cap is a case limit, not committed capital.

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01 / MARCH 2, 2026 / INITIAL INDICATION

Set the opening position.

FY ENDED DECEMBER 31, 2025

DOC-01 / SELLERBusiness brief ↗Company, scope and price expectations DOC-04 / FINANCE EXPORTManagement accounts ↗Reported P&L and adjustment support DOC-02 / INVESTMENT TEAMScreening mandate ↗Valuation and equity limits

SELLER SUBMISSION / DOC-01Open brief ↗

The seller’s position

Calder distributes industrial maintenance products from two central Ohio branches. The owner seeks $25.000m enterprise value, cash-free and debt-free, with normalized operating working capital included.

$34mFY2025 sales

11%largest customer / sales

34%top 10 / sales

The acquisition includes Calder Industrial Supply LLC. Calder Field Services LLC is under common ownership but is outside the transaction perimeter. Customer retention and account-level margin support have not been supplied.

MANAGEMENT ACCOUNTS / DOC-04Full financial export ↗

FY2025 operating schedule

Seller submission · USD $000 · expense rows shown positive
Account / bridge	Q1	Q2	Q3	Q4	FY25
Revenue	7,650	8,200	8,650	9,500	34,000
COGS before vendor incentives	6,050	6,450	6,800	7,350	26,650
Vendor incentive credited to COGS	—	—	—	450	450
Reported COGS, net	6,050	6,450	6,800	6,900	26,200
Cash operating expenses	980	1,020	1,060	1,140	4,200
Reported EBITDA	620	730	790	1,460	3,600
ERP implementation adjustment	—	60	120	—	180
Owner personal expense adjustment	30	30	30	30	120
Seller-adjusted EBITDA (submitted)	650	820	940	1,490	3,900

This is the seller’s submitted earnings bridge. Reconcile it to the accounts and the treatment specified in DOC-02 before using it for your screen.

Optional help: the opening earnings bridge

The mandate accepts $180k of nonrecurring ERP implementation services and $120k of discontinued owner personal costs for this screen. The recurring subscription is excluded from the ERP adjustment. No replacement cost is stipulated. The seller-adjusted total is a provisional starting point, not a completed earnings review.

Optional review prompt

Compare quarterly margins and the timing of non-routine credits. State what evidence you would request before relying on the seller’s earnings bridge.

BUYER MANDATE / DOC-02Open mandate ↗

Screen both limits.

Maximum entry multiple: 6.00× adjusted EBITDA
Sponsor equity cap: $12.000m
Debt drawn, case assumption: 3.25× adjusted EBITDA
Fees / incremental minimum cash: $0.600m / $0.400m

Use seller earnings provisionally. Debt is stipulated for the screen, not committed financing. Fees and cash are equity funded. Minimum cash is outside operating working capital. No closing price true-up is assumed.

Optional formula reminder

Sponsor equity = enterprise value + fees + incremental cash − assumed debt. Both the multiple cap and the equity cap constrain the permitted price.

↓ Learner workbook XLSX · complete Initial view before opening the diligence tabs ↓ Complete free preview ZIP · extract all files together, start with START-HERE and open solutions after your attempt

02 / APRIL 13, 2026 / EXCLUSIVE DILIGENCE

Would you re-trade the LOI?

Q-07 SUPPORT RECEIVED

DOC-03 / ASTERProgram terms & supplier letter ↗Contractual scope, tier and cutoff DOC-05 / SUPPORTING EXPORTSAP history, statement & credit memo ↗Different entities and accounting dates DOC-06 / EMAILS & REQUESTSManagement response and request log ↗Seller position and diligence status

ASTER / PROGRAM TERMSRead the signed terms ↗

Read the governing program.

Aster supplied its April 10 letter and the terms of the FY2025 program. Read DOC-03 before selecting the purchase population and rate; cite the clause supporting your treatment.

Optional help: applying the terms

The program names Calder Industrial Supply LLC, account CIS-44082. It applies to FY2025 merchandise invoiced, net of returns accepted by December 31, including credits posted later. Freight, tax and other accounts are excluded. The achieved rate applies to all eligible purchases: 1.5% below $12.000m and 3.75% at or above it. The supplier reports no amendment allowing aggregation or a forecast-based tier.

SELLER AP / PURCHASING GROUPOpen all supporting exports ↗

Purchase records and posted entries.

AP activity export · USD $000 · company filter CIS + CFS
Month	CIS-44082	CFS-66019	Group
Jan	675	150	825
Feb	695	150	845
Mar	835	150	985
Apr	775	160	935
May	835	160	995
Jun	895	160	1,055
Jul	855	170	1,025
Aug	875	170	1,045
Sep	955	170	1,125
Oct	895	180	1,075
Nov	975	190	1,165
Dec	975	190	1,165

Aster statement · CIS-44082 · USD $000
Month	Merchandise	Freight	Credits posted	Activity
Jan	680	15	(20)	675
Feb	700	15	(20)	695
Mar	860	15	(40)	835
Apr	780	15	(20)	775
May	840	15	(20)	835
Jun	900	15	(20)	895
Jul	860	15	(20)	855
Aug	900	15	(40)	875
Sep	960	15	(20)	955
Oct	920	15	(40)	895
Nov	960	15	—	975
Dec	960	15	—	975

CREDIT MEMO CM-260115 / JANUARY 15, 2026

Account CIS-44082 · merchandise credit $60k
Return authorization RA-251229 · accepted Dec 29, 2025
November purchases $20k / December purchases $40k

POSTED JOURNAL JE-25-1228 / DECEMBER 31 / $000

Dr rebate receivable 450
Cr 5125 / incentive recovery in COGS 450

DOC-05 includes an inventory matching note; DOC-06 contains the controller’s response and the current request register. Read those records before deciding the earnings treatment.

Optional help: the return and rebate entries

The return receivable was recorded in December; the January memo settles it. Returned merchandise was already removed from inventory and merchandise COGS. No rebate cash or offset has occurred. The case confirms all retained program merchandise was sold in FY2025, but does not establish which quarter’s purchases were sold in which quarter.

Optional reconciliation prompt

Start with the seller’s group export. Compare the legal entity, charges and credit dates with the program definition. Receiving a statement does not establish that its accounting total equals eligible purchase volume.

MANAGEMENT POSITION / DOC-06Read the email thread ↗

The seller maintains the accrual.

Management says the purchasing group exceeded $12m and expects the upper tier to be honored. The controller proposes treating any collection difference through closing working capital, with no change to earnings or the LOI price.

The November 30 purchasing forecast put main-account FY2025 eligible volume at $12.300m. The forecast is retained with the correspondence.

Q-07Annual vendor incentive supportReceived / buyer conclusion pending

Q-08All-vendor incentive reviewOpen

Review all 15 request IDs ↗ and choose the 2–3 that matter most to your next decision.

WORKPAPER / REVISED RECOMMENDATION

Resolve the finding. Make the call.

$m to three decimals; numerical tolerance ±$0.0005m. Multiple tolerance ±0.005×.

Reconciled eligible purchases ($m)Rebate actually earned ($m)How should Q-07 affect the analysis?Revised adjusted EBITDA ($m)Maximum permitted enterprise value ($m)LOI price / revised adjusted EBITDA (×)Sponsor equity at the $23.400m LOI price ($m)Your revised enterprise value ($m)Use 0 when withholding a bid.Your revised call

Your investment update

Keep each field concise, with at least 40 characters. Cite a specific source clause in your finding. In conditions, rank 2–3 request IDs and explain which response would change your bid or action. Length checks do not grade reasoning.

Finding and evidenceEarnings treatmentPrice and fundingRecommendationConditions and unresolved questions

03 / DEAL TEAM DEBRIEF

The evidence changes the agreed economics.

CALCULATIONS / JUDGMENT / OPEN ISSUES

Revised adjusted EBITDA$3.600m$0.300m below the seller’s view

Maximum permitted EV$21.600m$1.800m below the LOI price

Equity at the LOI price$12.700m$0.700m above the equity cap

RECONCILIATION / Q-07

Scope and cutoff determine entitlement.

Start with $12.240m in the AP group. Exclude the $2.000m affiliate, $0.180m freight and $0.060m January credit for returns accepted before year-end. Eligible purchases are $10.000m.

The supplier statement reconciles differently: $10.320m merchandise + $0.180m freight − $0.260m posted credits = $10.240m activity. Remove freight and the late return credit to reach the same eligible base.

At 1.5%, earned rebate is $0.150m. Against $0.450m booked, increase COGS and reduce the rebate receivable by $0.300m. Corrected reported EBITDA is $3.300m; accepted addbacks bring adjusted EBITDA to $3.600m.

The merchandise-return accounting was already recorded. Do not take the January memo as another EBITDA reduction.

RE-TRADE / PRICE AND FUNDING

Test both limits at the LOI price.

6.00× × $3.600m permits $21.600m EV. Assumed debt is 3.25× × $3.600m = $11.700m. The equity cap alone permits $22.700m EV, so the multiple limit binds.

At the $23.400m LOI price, entry is 6.50× and equity is $12.700m. At $21.600m, equity is $10.900m. The $0.300m correction reduces maximum price by $1.800m and assumed debt by $0.975m.

A re-trade is a negotiation, not an automatic price adjustment. Seller acceptance and committed financing are not established. A future closing working-capital calculation needs an agreed definition, peg and closing statement; none is supplied.

A SHARPER EARNINGS REVIEW

Separate the annual correction from an illustrative quarterly allocation.

Posting the $0.300m correction against the Q4 accrual leaves Q4 reported EBITDA at $1.160m, or 12.2%. That still leaves the entire earned annual rebate in Q4. The illustration below allocates the $0.150m earned benefit by eligible purchases. It does not change annual EBITDA or create a second adjustment. Quarterly inventory and COGS matching is unverified; this is not a verified quarterly normalization.

Illustrative purchase-based rebate allocation · USD $000
Measure	Q1	Q2	Q3	Q4
Earned rebate allocated by purchases	32.4	36.9	39.6	41.1
Illustrative reported EBITDA	652.4	766.9	829.6	1,051.1
Illustrative reported margin	8.5%	9.4%	9.6%	11.1%
Illustrative adjusted EBITDA	682.4	856.9	979.6	1,081.1
Illustrative adjusted margin	8.9%	10.4%	11.3%	11.4%

Under this allocation convention, Q3 and Q4 adjusted margins are 11.3% and 11.4%. Reported margins before addbacks are 9.6% and 11.1%; comparing those alone can overstate the quarter-to-quarter change in underlying performance. Quarterly inventory/COGS matching remains unverified. Corrected adjusted EBITDA grows 27.7% on 7.6% sales growth versus FY2024. The data do not establish whether mix, pricing, cut-off or other accruals explain that annual gap.

Using the final reconciled January–November volume of $9.080m, the $12.300m forecast implies a $3.220m December gap, versus roughly $0.9m in recent months. At November 30, before the subsequently accepted $0.020m return of November goods, that gap was $3.200m. Either view calls for a specific explanation. Actual Q4 purchases annualize to $10.960m, below the $12.000m tier. These are reasons to challenge management’s forecast and control process. Annualizing one quarter is a sensitivity, not a forecast or contractual entitlement.

RECOMMENDATION / MULTIPLE DEFENSIBLE ANSWERS

State what would change your decision.

Re-trade

Propose no more than $21.600m with conditions on broader vendor accruals, sustainable earnings and funding. A lower bid may reflect unresolved risks.

Pause

The unsupported account aggregation, aggressive forecast and remaining margin growth can justify withholding a bid until Q-08 and related requests are resolved.

Pass

Decline if the seller insists on the LOI price or the evidence burden exceeds your tolerance. This does not require alleging fraud.

Still unsupported: a completed QoE, management intent, sustainable future margins, a target IRR, lender approval or a contractual closing NWC adjustment. Q-07 is quantified; seller acceptance and implementation are not evidenced.

YOUR OPENING CALL

YOUR REVISED CALL

YOUR FIVE-PART UPDATE

ONE DEFENSIBLE MODEL UPDATE

Finding and evidence

DOC-03 “Account treatment” excludes affiliate aggregation; “Program calculation” excludes freight and deducts returns accepted by December 31. Reconcile DOC-05’s $12.240m AP group less $2.000m affiliate, $0.180m freight and $0.060m late-posted accepted returns to $10.000m eligible volume. These clauses do not support the seller’s group-based tier claim.

Earnings treatment

Earned rebate is $0.150m against $0.450m booked. Increase FY2025 COGS and reduce the rebate receivable by $0.300m. Retain the accepted addbacks; revised adjusted EBITDA is $3.600m. The return memo itself does not create another earnings correction.

Price and funding

The $23.400m LOI price now implies 6.50× and $12.700m equity. Both mandate limits fail. Maximum permitted EV is $21.600m, with $11.700m assumed debt and $10.900m equity.

Recommendation

Seek a re-trade to no more than $21.600m, conditional on the remaining diligence. The quantified change supports revised economics; it does not establish an attractive return or guarantee that the seller will accept.

Conditions and unresolved questions

First, Q-08: further unsupported vendor accruals would reduce my earnings base and bid. Second, Q-05: unexplained SKU margin gains would make me pause rather than underwrite their continuation. Third, Q-09: cash needs, maintenance capex or unfavorable working-capital definitions could require more equity or a lower price. Confirm seller alignment, the future owner’s operating role, any replacement compensation and committed equity and debt. No amount is supplied for a further deduction.

Compare the evidence, economics and conditions. Different wording, a lower bid or a well-supported pause/pass can also be defensible.

SELF-REVIEW / NO AUTOMATIC WRITING GRADE

Does your recommendation earn its conclusion?

Use these five comparisons before revising. Different conclusions can be strong when the evidence and conditions support them.

Finding and evidence

Stronger: Names the clause and record; reconciles account scope and cutoff.

Weaker: “The rebate looks wrong” without a source trail.

Earnings treatment

Stronger: Explains the journal and avoids counting the same correction twice.

Weaker: Changes EBITDA or working capital without explaining the accounting.

Price and funding

Stronger: Shows both mandate limits, the reference price and required funding.

Weaker: Quotes a lower multiple or bid without checking equity.

Recommendation

Stronger: Connects an action and price to evidence; states what would change the decision.

Weaker: Treats the maximum permitted price as a required or attractive bid.

Conditions

Stronger: Ranks 2–3 request IDs and explains the decision consequence of each answer.

Weaker: Lists every open item or says “subject to diligence.”

For a searcher, an affordable equity requirement still needs committed capital and a credible plan to operate the business. Clarify the owner’s duties, transition and replacement compensation; the files provide no amount for an additional deduction. Corporate-development learners should keep standalone economics separate from unprovided synergies.

Completed Excel solution ↗Source-linked solution & debrief ↗

You can revise your second recommendation and check again. Prepare a fresh record after edits.

THE COMPLETE CALDER CASE

Take the acquisition through three decisions.

The planned $199 founding edition adds customer profitability and retention evidence, a separate working-capital decision and a changed financing constraint. Five individual seats; email releases and a full satisfaction guarantee.

See the founding case and delivery terms →

Calder Industrial Supply.
Your recommendation is due.

Set the opening position.

The seller’s position

FY2025 operating schedule

Screen both limits.

Choose a price and conditions.

Review your opening screen.

Would you re-trade the LOI?

Read the governing program.

Purchase records and posted entries.

The seller maintains the accrual.

Resolve the finding. Make the call.

Your investment update

The evidence changes the agreed economics.

Scope and cutoff determine entitlement.

Test both limits at the LOI price.

Separate the annual correction from an illustrative quarterly allocation.

State what would change your decision.

Re-trade

Pause

Pass

Finding and evidence

Earnings treatment

Price and funding

Recommendation

Conditions and unresolved questions

Does your recommendation earn its conclusion?

Finding and evidence

Earnings treatment

Price and funding

Recommendation

Conditions

Take the acquisition through three decisions.