Complete Private Equity (LBO) Financial Model

Description
This is a professional financial model which performs a thorough assessment of a private equity project with debt leverage. The model is built to all standards of private equity and investment banking industry.

Key features of this model:


- Covers in detail all stages of a private equity investment
- Produces three financial statements and a detailed return analysis
- Makes a granular analysis of the target company (revenues, cost of sales, fixed overhead, working capital, capex, debt financing)
- Performs a deep sensitivity analysis and can handle up to seven scenarios (you can change scenarios from any sheet)
- Makes project valuation under several methods
- Includes professionally designed magazine-quality charts


The model is accompanied by a detailed text guide providing user instructions, explaining how the model functions and revealing tricky Excel issues.


1. Acquisition


At the acquisition stage, you can define the entry multiple and the purchase price. If the project is leveraged, you can define the loan portion (LTV ratio) and split the loan funding into a credit line and bridge (mezzanine) debt. You can also set the amount of transaction fees.


It is assumed that the investment target company sells up to seven products. The model takes historic actuals and makes projections related to prices, volumes, overhead costs, capex, working capital assumptions, other financial parameters.

2. Refinancing

At some point you might refinance the acquisition loan with a new loan under better terms, after the project is stabilized and the risk profile of it becomes more conservative. You can also refinance with higher leverage and distribute the resulting extra cash to the investors. The model shows both refinancing scenarios and allows to set the moment of refinancing and the conditions of a new loan.

3. Exit

At exit stage, you can define the year of exit, exit multiple and transaction fees. You can also choose the method of valuation (EBITDA multiple or terminal growth under the Gordon’s model).

The analysis is supported by the charts which include a valuation bridge chart, valuation ranges under different methods (a “football field” chart), income statement and cash flow bridge chart (for the target company) and others illustrating operating performance and debt service.