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Originally published: 28/06/2016 14:43
Last version published: 22/03/2021 08:13
Publication number: ELQ-65533-3
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Leveraged Buyout LBO Model - DCF

A comprehensive LBO model in Excel, of business acquisition

by Amit Tandon
Excel & VBA, Promoter - ExcelAnytime.comFollow 185

56 reviews4,506 views|4 comments|Bookmark download for free

acquisitionbusinessfinanceleveraged buyoutirrcash flowsdcfcapmlbo analysislbo model

Description

A comprehensive LBO model of business acquisition with DCF Analysis, IRR, WACC, CAPM, Ratio Analysis with 10-Year Projections of Financial Statements and Cash Flows.

A leveraged buyout (LBO) is an acquisition of a company or a segment of a company funded mostly with debt. A financial buyer (e.g. private equity fund) invests a small amount of equity (relative to the total purchase price) and uses leverage (debt or other non-equity sources of financing) to fund the remainder of the consideration paid to the seller.

The LBO model provides a current valuation to an investor based on future cash flows and financial projections, helping the investor to determine a fair consideration for the business he intends to acquire. The aim is to enable an investor determine a risk-adjusted Internal Rate of Return (IRR) of the target company after considering the multiple components of financing and analyzing the key financial ratios. A leveraged buyout is the act of purchasing a business or company using leverage and a professional financial model is vital to consider the various aspects and scenarios to evaluate the transaction.

Note: You are welcome to report any errors or any suggestion for improvement. I will earnestly consider all your valuable inputs.

This Best Practice includes
1 Excel Model File

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  Nice dashboard

  I enjoy working with this dashboard.
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  Excellent

  Good and thorough recap!
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• 

  VICTORIA933 2 years ago
  User

  What is the rationale of having cash minimum? How does this affect the model?

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• 

  VICTORIA933 2 years ago
  User

  Can you explain to me the goodwill / bargain purchase calculations from Cell C43 - Cell C53 in the 'Input' tab?

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• 

  Paul Whitley 4 months ago
  User

  Almost every tab has a circular in it, how can I fix it?

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  • 

    Amit Tandon 1 week ago
    Authorstar

    Apologies for the delay response. You will need to "Enable iterative calculation" in Options > Formulas, so as to allow circular calculations.
    
    Best Regards

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