Deal Terms

Question 1

[Year]A

Answer 1

actual historical results

Question 2

[Year]B

Answer 2

budgeted results (typically based on management’s budget)

Question 3

1st Lien/2nd Lien

Answer 3

Senior secured loans often placed on the broadly syndicated loan market. 1st lien has a priority right to the borrower’s collateral ahead of the 2nd lien debt

Question 4

Adjusted EBITDA

Answer 4

Actual EBITDA as adjusted by management to add back certain non-recurring, non-cash, or other extraordinary items. Credit agreements typically will limit the types/amounts of adjustments that may be made

Question 5

CAGR

Answer 5

Compound annual growth rate

Question 6

CapEx

Answer 6

Capital Expenditure; funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment; any type of expense that a company capitalizes, or shows on its balance sheet as an investment, rather than on its income statement as an expenditure

Question 7

Carried Interest

Answer 7

the incentive fee 6S is entitled to receive in respect of the investments it manages on behalf of the 6s funds and their investors

Question 8

Cash Conversion

Answer 8

The percentage of EBITDA that turns into free cash and is not required to be reinvested in the business as capital expenditures (Adjusted EBITDA - capex)/Adjusted EBITDA)

Question 9

ECT

Answer 9

EBITDA, cash generation, and trajectory - the three most critical metrics that we continually look to monitor at our portfolio companies

Question 10

Fully-Diluted Ownership

Answer 10

Primary ownership but then after taking into account dilution from stock options and equivalent

Question 11

GAAP

Answer 11

Generally Accepted Accounting Principles; standards that encompass the details, complexities, and legalities of business and corporate accounting

Question 12

Gross IRR

Answer 12

the Internal Rate of Return enjoyed by investors as measured by distributions made to them from our Funds plus the Unrealized Value of the investments still held by the Funds, but before calculation of the Carried Interest, other fees and expenses

Question 13

Leveraged recap(italization)

Answer 13

A borrowing made by a portfolio company where the proceeds of the borrowing are distributed by the portfolio company to its equity owners

Question 14

LTM

Answer 14

Last Twelve Months

Question 15

Mark or Valuation

Answer 15

the fair market value of an Unrealized (i.e., not fully sold) investment as determined by 6S in accordance with GAAP

Question 16

Net Debt Multiple

Answer 16

also referred to as Leverage Ratio

(Debt- Cash)/EBITDA

Question 17

Net IRR

Answer 17

same as Gross IRR, but calculated after Carried Interest and other fees and expenses