Excel LBO Modeler
Overview
Creates leveraged buyout models with debt structuring, amortization schedules, and sponsor returns analysis for private equity transactions.
Prerequisites
- Excel or compatible spreadsheet software
- Target company financial data
- Debt term sheet parameters
- Entry/exit multiple assumptions
Instructions
- Set up transaction structure (purchase price, debt/equity split)
- Build debt schedules for each tranche (senior, mezzanine, etc.)
- Create operating projections with debt service
- Calculate cash flow available for debt paydown
- Model exit scenarios and calculate IRR/MOIC
Output
- Complete LBO model with sources & uses, debt schedules, and returns
- IRR and MOIC at various exit multiples and years
- Sensitivity tables for entry/exit multiple and leverage
Error Handling
| Error | Cause | Solution |
|---|---|---|
| Negative cash flow | Debt service exceeds EBITDA | Reduce leverage or restructure debt terms |
| IRR #NUM! | No valid solution | Check exit value exceeds equity contribution |
| Circular reference | Cash sweep tied to interest | Enable iterative calculation |
Examples
Example: Mid-Market LBO Request: "Build an LBO model for a $100M EBITDA company at 8x entry" Result: 60% senior / 40% equity structure, 5-year model, IRR analysis at 7x-10x exits
Example: Add-On Acquisition Request: "Model a bolt-on acquisition with synergies" Result: Integrated model with synergy phase-in and accretion analysis
Resources
- Macabacus LBO Modeling
- WSO PE Interview Prep
${CLAUDE_SKILL_DIR}/references/lbo-formulas.mdfor debt schedule templates