Tl;dr: A simple LBO template excel model to review the opportunity in acquiring a company with debt.

You may have heard about LBOs; where a massive amount of debt is used to buy a company. Some times it works great and the Private Equity firms make out like bandits, but other times things go pear shaped like at RJR Nabisco.

What’s an LBO? Will, in nerd speak, an LBO is a financial transaction in which a company is purchased with a combination of equity and debt, such that the company’s cash flow is the collateral used to secure and repay the borrowed money.

Download the LBO template

 

The simple LBO template

In 2010, KKR made a go of acquiring Perpetual Asset Management for $1.73bn. For fun to see what a deal would like, I made this template to have a quick look myself. There are far more complicated manners of evaluating an LBO, this isn’t one of them. it’s something you can churn out in an hour or two.

Screenshots of the model

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