Lehman Fee Calculator

Being in the Private Equity and investment banking world you run across the Lehman Formula in paying advisor/broker/banker fees quite often. Most all of us know the structure of 5%, 4%, 3%, 2%, and 1% for the first 5 million respectively, but sometimes it is just easier to have a calculator that does it for you. I couldn’t easily find any online and had some time to kill one evening, so I made one (includes option for Double Lehman):

Link to Lehman Fee Calculator by Dan Herr

Click image to access Calculator

Unfortunately, WordPress doesn’t let you embed Javascript (Myspace can tell you why :)), so either click the above image or go to:

http://danherrski.github.io/lehmanfeecalculator/

The other ways to remember the calculation / keep it simple in your head are:

  • $150k for first $5m TEV + 1% of the balance; OR
  • $200k for the first $10m TEV + 1% of the balance

 

In the future I could add flat % (i.e.1% & 2%) as well as Reverse Lehman options to this calculator if enough people would find it helpful – please let me know in the comment section below.

Happy hunting!

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Comments

  1. Thanks Dan. ERP insightful. Would be interested in the double percentage values within the calculator.

  2. Dan – Love the calculator. Thanks for sharing. I think it would be helpful to have another option of just putting in the sale price. For example, I have a current deal that is $2.5M paid out on Lehman scale. I know the sale price (2.5M) but off the top of my head, I don’t recall the ebitda and exact multiple that the buyer is using without looking it up. Would be easier to just enter sale price. Thanks.

    • Sizzle – that definitely makes a lot of sense. Let me work on that and see if I can add. I know it is not a perfect solution, but for the time being you could put $2.5m as the EBITDA and 1x as the multiple to get to the $2.5m TEV / sales price. Thanks again for your feedback!

  3. Handy, Dan…Thanks

  4. Hi Dan,

    Does this formula apply to “finders fee” for simplifying referring a deal?

    • Hi Bruce, yes this is the typical formula applied to a finders fee in M&A for someone referring a business to a buyer for acquisition or investment. Hope that helps 🙂

      – Dan

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