Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
  • Leveraged Buyout (LBO) Model
Originally published: 20/09/2019 07:34
Last version published: 25/10/2019 20:18
Publication number: ELQ-56081-2
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Leveraged Buyout (LBO) Model

Simple LBO Model in Excel to understand how a Leveraged Buyout operation is carried out.

Description
This model distills the core drivers of an LBO into a easy to use / easy to understand Excel Model. Please let me know if you have any issues using this model, as I tried to make it as straightforward as possible.

LEVERAGED BUYOUTS: BASIC OVERVIEW

A leveraged buyout is the acquisition of a public or private company with a significant amount of borrowed funds. A private equity firm (or group of private equity firms) acquires a company using debt instruments as the majority of the purchase price. After the purchase of the company, the debt/equity ratio is generally greater than 1.0x (debt generally constitutes 50-80% of the purchase price). During the ownership of the company, the company’s cash flow is used to service and pay down the outstanding debt. The overall return realized by the investors in an LBO is determined by the exit cash flow of the company (EBIT or EBITDA), the exit multiple (of EBIT or EBITDA), and the amount of debt that has been paid off over the time horizon of the investment. Companies of all sizes and industries can be targets of leveraged buyout transactions, although certain types of businesses, as discussed earlier, make better LBO targets than others.

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1 Excel File

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