17 January 2019 Experts in DCF and LBO modeling

LBO model tutorial with free Excel

The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of an acquisition is named a Leveraged Buyout Analysis. It is used to determine an implied valuation range for a given target in a potential LBO sale based on achieving acceptable returns.

Step by step LBO Valuation tutorial

In these coming four steps, you will be able to perform your own LBO Analysis. This LBO model is simplified in order to teach you the basics of a LBO valuation.

Start by downloading this LBO model for Excel (it is 100% free and takes less than 1 minute to download). All required inputs will be described in detail below.

Expand each section to follow the (free!) LBO-model tutorial. Now lets do some modeling!

Sneak peek of the LBO model (click to enlarge screenshots)

You need to activate “iterations” in Excel for this LBO model to work properly. It can be switched on under Excel options / formulas / then check the box “Enable iterative calculations”. See picture here for help (if needed).

Step 1 - Enter Deal Value
Step 2 - Enter historical financials
Step 3 - Forecast period
Step 4 - Understanding the results and output
It would mean the world to me if you could help me with a 5-star rating here and possibly also some nice comments, if you have completed this tutorial successfully.

This will encourage me to continue to develop the best Excel models and will take very little of your time…

Any questions??

Business valuation proI will do my best to help you quick

I will gladly help you with any question you might have. Either comment below the relevant content or send me an email or use my contact form which can be found here.

Specialities: Business valuations, Excel models, Business development, Investment Banking, Buyouts, Divestments, Share issues, IPOs, Management Buyouts, Leveraged Buyouts.

Have a great day! (thanks for sharing my website which helps my content available to more users)


9 thoughts on “LBO model tutorial with free Excel

  1. Where do I input how much debt the company takes in in order to finance the LBO?

    How do I calcuate that part?

    Thank you in advance

  2. Thank you very much for this comprehensively-explained LBO Model. However, this model assumes the target has no existing debt. Do you have such LBO models with existing debt of target? Many Many Thanks

  3. Step 4 – Understanding the Results section has a typo. It says the IRR is 17%, but really it is 19% (as the picture above the comment, and the model itself, both correctly reflect).

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