
Leveraged Buyout (LBO) models
What is a Leveraged Buyout (LBO) and what is LBO analysis?
The leveraged buyout model (LBO) is the act of acquiring a company or a section of a company mostly funded by borrowed money, so that the cost of acquisition can be met. The acquiring company’s assets along with the assets of the target company most often serve as collateral for the loan(s). Hence, this allows the acquiring company to make large acquisitions without having to use a huge amount of financial capital.
The Leveraged Buyout (LBO) process works in two major steps. First, the new investors (the acquiring company) form a new corporation, specifically for the acquisition of the target. Secondly, the target becomes a subsidiary of the new corporation or both entities merge.
LBOs can either be a public company bought by a private-held entity, spin-offs (public or private corporations selling of elements of their business to gain cash) or private deals between private entities.
More about types of LBO transactions here
When is a Leveraged Buyout (LBO) analysis used?
Given the need for a positive return on investment on such an operation, a thorough LBO analysis is often needed and undertaken by the acquiring firm. The LBO analysis enables to:
1- Compute the highest possible purchase price for a target company, that can be afforded by the prospecting acquiring firm according to certain leverage (debt) levels and other returns on equity parameters.
2- Get an idea of the leverage and equity characterising a possible LBO transaction for a given purchase price.
3- Determine the minimum valuation acceptable for an LBO firm looking to acquire the target company. As LBO transactions are often carried out in the absence of strategic buyers, the firm should only accept possible transactions that give an expected return on equity higher than the LBO firms hurdle rate.
All of this is done through complex LBO Models in Excel often drafted by financial modelling experts for the acquiring firm.
More on LBO Analysis here
How can I learn about the mechanisms of a Leveraged Buyout LBO Analysis?
LBO analysis is carried out by LBO firms, private equity and investment banking firms using a number of financial tools, and step-by-step methodologies.
To learn the mechanisms of the LBO analysis you can decide to approach to tackle the issue in multiple ways. If you have some time available, you can decide to take a course (online or offline) on the topic so that you can get a deep and broad understanding of the subject. If you would like to learn on the job, you can also apply for a job in an LBO firm as an analyst where you will have the opportunity to learn from the best professionals using proven methodologies.
Where can I find Leveraged Buyout LBO Models in excel as examples?
If you would simply like to find a tool to help you out in an LBO transaction, or simply to understand the steps and methods, you can check the LBO models published below in the Eloquens Catalog and which are very useful Leveraged Buyout Examples. These LBO models are drafted by some of the best professionals, academics and experts on market and are ready-to-use in LBO analysis and to apply. Good luck!
- Leveraged Buyout (LBO) Model including outputs to print to PDF or transfer to a PowerPoint presentation.29Discussadd_shopping_cart$10.00
by Sean Peters
Paper LBO Model
The Paper LBO is the most basic version of an LBO you'll be expected to complete during a private equity interview.73Discussadd_shopping_cartfreeby Sean Peters
LBO model - Leveraged Buyout Analysis
A step by step LBO model tutorial. It is easy to use and we provide support if needed. Have fun modeling!23,0187add_shopping_cart$9.00by Patrik Johansson
LBO Financial Model Template (Detailed)
Detailed LBO model to analyse investor returns (IRR and Investment Multiple) over a period of 5 year as a sample case141Discussadd_shopping_cart$40.00by Anuj Verma
LBO Financial Model Template (Detailed) - EXCEL
LBO (Leveraged Buyout) financial model for private companies (clean, simple, functional, and reusable template).1,7203add_shopping_cart$500.00by Karl Schopf
DCF & LBO Financial Model (Basic) - EXCEL
DCF (discounted cash flow) and LBO (leveraged buyout) financial model (clean, simple, functional, and reusable template)105Discussadd_shopping_cart$100.00by Karl Schopf
LBO Financial Model Template (Illustrative) - EXCEL
LBO (Leveraged Buyout) financial model for private companies (clean, simple, functional, and reusable template).1,511Discussadd_shopping_cart$250.00by Karl Schopf
LBO (Leveraged Buyout) Excel Model
Complete LBO (Leveraged Buyout) model for financial analysis of potential investments and acquisitions.2,015Discussadd_shopping_cartLeveraged Buyout (LBO) Excel Model
Leveraged Buy Out (LBO) Model: presents the case of the purchase of a company by using a high level of debt financing.201Discussadd_shopping_cart$119.00by Big4WallStreet
LBO (Leveraged Buyout) Excel Model Template
This LBO Model from CFI enables a thorough analysis of an LBO structured acquisition of a company.863Discussadd_shopping_cart$100.00by CFI
Public To Private LBO - Excel Model Template
This is an excel spreadsheet including 3 financial statements297Discussadd_shopping_cartfreeby Wall Street Oasis
Private Equity - Professional LBO Excel Model
Professional LBO (Leveraged Buyout) Model on Public Company - Used in Industry386Discussadd_shopping_cart$90.00by Joshua Jia
Generic LBO (Leveraged Buyout) Excel Model Template
General LBO model with return calculations and integrated financial statements448Discussadd_shopping_cart$55.00by ModellingGuy
Leverage Buy-Out (LBO) Excel Model
A 7 Tab Excel LBO (Leverage Buyout) Spreadsheet for Investment Banking.220Discussadd_shopping_cart$49.00by Jatin Goel
Quarterly Leveraged Buyout LBO Model
An LBO model illustrating a number of detailed analytical techniques to construct an acquisition LBO model with history1,663Discussadd_shopping_cart$10.00by Prof. Ed Bodmer
LBO Excel Model - with Capital Structure Analysis
Advanced financial model for Leveraged Buyout with analysis of the capital structure.918Discussadd_shopping_cart$5.00by Prof. Ed Bodmer
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