This LBO Model is a complex model made comprehensible in this Excel template format.

A Leveraged Buyout occurs where a company is acquired with funds comprised of a significant amount of debt. The assets of the two companies are utilized as collateral. This allows the purchaser to reduce the amount of equity invested and instead fund the purchase with debt. An LBO Model enables investors to thoroughly evaluate the transaction and the risk attached to it. This LBO Model is comprised of:
  • 3 statement and operating model
  • Operating scenarios
  • Transaction assumptions
  • Debt and interest schedule
  • Levered IRR analysis by investor type
  • Sensitivity analysis
The capital structure in an LBO may include any of the following 3 types of debt, whilst also being comprised of equity:
  1. Bank debt – the least expensive form of financing instrument, and with a lower interest rate. However, banks are wrapped in red tape, which can restrict a company.
  2. High Yield Debt/ Subordinated Debt – typically an unsecured debt, carrying a higher interest rate than the Bank Debt. Where liquidation occurs, Bank Debt is also paid before the High Yield Debt.
  3. Mezzanine Debt – often funded by hedge funds and private equity investors, with a higher interest rate than the others.
If you would like to view a detailed tutorial on how to build this LBO Excel Model from scratch, enroll in CFI's Leveraged Buyout Modeling Course now!
Reviews Add a review
Ken Chow

Thanks I like this lbo model since it’s very clearly organized and structured

More From Corporate Finance Institute®

Browse our top rated business templates. See All
restructuring financial model template preview 1 Restructuring Financial Model Template
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
TMT Financial Model Template Preview TMT Financial Model Template
This TMT financial model template is used to value technology, media, and telecom firms. This model provides a template to…
bank financial model template preview 1 Bank Financial Model Template
This bank financial model template is used to value financial institutions group (FIG) companies. This is a comprehensive model that…
Synthetic Call Chart Option Profit/Loss Graph Maker
This free Option Profit/Loss Graph Maker allows the user to combine up to ten different types of options as well…
Directional Trading Strategies Template Directional Trading Strategies Template
The directional trading strategies template allow users to determine the profit when buying options. This template focuses on directional strategies…
HELOC Calculator Template Home Equity Line of Credit (HELOC) Calculator
This home equity line of credit (HELOC) calculator can calculate the maximum amount of loan a homeowner is eligible to…