LBO Model
Leveraged buyout analysis with debt scheduling, cash sweeps, and returns attribution. Compute sponsor IRR, MOIC, and sensitivity across exit multiples and growth assumptions.
Overview
What is a LBO Model?
A Leveraged Buyout (LBO) model simulates the acquisition of a company using significant debt financing. It projects cash flows over a hold period (typically 5-7 years), models debt paydown from operating cash flow, and calculates returns to the private equity sponsor at exit through IRR and MOIC.
Private equity professionals build LBO models for every potential investment. Investment banking analysts build them for PE clients in sell-side processes. LBO modeling is one of the most tested skills in PE and IB interviews.
Features
What you get with this model
Multiple debt tranches with different terms
Mandatory and optional debt repayment (cash sweep)
Returns attribution: leverage, growth, multiple expansion, FCF
IRR and MOIC calculation at various exit multiples
Two-way sensitivity table (exit multiple vs. growth rate)
Formula-driven Excel export
Use cases
How to use this model
PE interview prep: the most commonly tested modeling skill
Deal screening: can this company support the required leverage?
Returns analysis: what drives returns in a specific deal?
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