Segments
3
Project Orion
Diligence · Week 3
Target: Meridian Industrial Group · Flow Control · Cleveland, OH
EV
$2,410M
Entry
9.2x LTM
Base IRR
22.1%
IC Date
Jul 24
Company snapshotPrivate · Sponsor-owned
Engineered flow-control systems for water, energy transition, and industrial process markets. 78% aftermarket or spec-locked revenue; installed base of 214,000 units in 40 countries.
Employees
6,240
Auditor
EY
Hold since
2021
Operating build$M · MODEL
| Yr | Revenue | EBITDA | Interest | CFAD | End debt |
|---|---|---|---|---|---|
| Y1 | 1,842 | 286 | 137 | 69 | 1,372 |
| Y2 | 2,008 | 311 | 130 | 89 | 1,284 |
| Y3 | 2,189 | 339 | 122 | 112 | 1,172 |
| Y4 | 2,386 | 370 | 111 | 138 | 1,033 |
| Y5 | 2,601 | 403 | 98 | 168 | 865 |
Financial trajectoryREVENUE $M · EBITDA LINE
Revenue
EBITDA (15.5% margin)
LBO output · base case5-YR HOLD · EXIT 9.0x
Entry EV/EBITDA
9.2x
Net leverage
5.5x
Exit multiple
9.0x
5-yr IRR
22.1%
MOIC
2.71x
IRR sensitivityENTRY × EXIT MULTIPLE
| Entry \ Exit | 8.0x | 8.5x | 9.0x | 9.5x | 10.0x |
|---|---|---|---|---|---|
| 8.0x | 27.6% | 29.7% | 31.7% | 33.6% | 35.4% |
| 8.5x | 23.2% | 25.3% | 27.2% | 29.0% | 30.7% |
| 9.0x | 19.6% | 21.6% | 23.4% | 25.2% | 26.8% |
| 9.5x | 16.5% | 18.5% | 20.3% | 22.0% | 23.6% |
| 10.0x | 13.9% | 15.8% | 17.5% | 19.2% | 20.8% |
Green ≥ 25.0 · Red < 15.0 · boxed cell = 9.0× / 9.0× · base case 9.2x / 9.0x = 22.1%
Diligence notesOPEN · 7
Customer concentration
Top-3 customers are 34% of FY25 revenue; largest contract renews Mar-2027 with no change-of-control waiver obtained.
Pension underfunding
UK DB scheme underfunded by $46M on a buyout basis. Actuarial review due Jul 18.
ERP migration
SAP S/4 cutover mid-integration; $12M remaining spend and key-person risk in Cleveland IT.
Quality of earnings
QoE draft v4 confirms 96% of reported Adj. EBITDA; add-backs substantially validated.
Environmental Phase I
No recognized conditions across 11 owned sites; two legacy sites indemnified by prior owner.
FX translation exposure
~22% of revenue in EUR/GBP with no layered hedging program; a 5% USD move swings reported EBITDA ~$9M.
Customer references
Nine of ten reference calls complete; renewal intent confirmed at the top-10 accounts outside the Mar-2027 contract.
Outputs · what the desk shipsDETERMINISTIC · FROM THE LIVE MODEL
IC memo
Recommendation memo — thesis, LBO returns, key risks, and workstream status — assembled from this deal in the selected house style.
LBO model
4-tab Excel workbook — Summary · Assumptions · Debt Schedule · Sensitivity — from the deterministic engine.
Stock noteOn Market →
Catalyst-ranked read on a public name — draft it live from the Market surface.
Diligence summarySoon
Open items, QoE status, and management questions in one export.
Ready
Building
Validating
Ready to download
Pick an output — it builds from the live model and downloads. Deterministic: the memo and the model always agree.
Deal media playbookLINK-BASED · NO STREAM EMBEDDED
42:10
Meridian Q2 earnings call — flow-control aftermarket
Management quantifies the 78% aftermarket / spec-locked mix and the Mar-2027 renewal without a change-of-control waiver.Source-linked preview — synopsis only; open the full item at the source. No broadcast embedded.
18:04
CEO on the energy-transition capex cycle
Frames the revenue-growth assumption; note the process-market destocking caveat that the QoE stress-tests.Source-linked preview — synopsis only; open the full item at the source. No broadcast embedded.
09:22
Flow-control sector primer — aftermarket economics
Third-party read on the margin durability underpinning the LBO base case.Source-linked preview — synopsis only; open the full item at the source. No broadcast embedded.
Deal wireDILIGENCE-RELEVANT · SNAPSHOT
SEC EDGARJul 9Filing
Meridian files amended credit agreement — covenant headroom detail
WhyConfirms 5.5× total-leverage covenant with a 0.5× step-down at Y2; ties to the LBO debt schedule.
Earnings callJul 8Transcript
Peer read-through: flow-control aftermarket mix +180bps YoY
WhySupports the 78% aftermarket/spec-locked thesis and the margin durability in the base case.
Trade pressJul 3Sector
Process-market destocking flagged by two industrial peers
WhyWatch-item for the revenue-growth assumption; corroborates the QoE order-rate sensitivity.
Data roomJul 2Diligence
Environmental Phase I posted for 11 owned sites
WhyClears the environmental workstream; two legacy sites indemnified by prior owner.
Workstream timelineJUN 8 → JUL 26
Financial QoE
v4 draft
Commercial VDD
Done Jun 30
Legal & Contracts
COC waiver
Environmental Ph. I
Done Jun 26
IT / ERP Review
On track
Debt Financing
TLB launched
IC Memo
Starts Jul 8
Complete
Active
At risk
Planned