LBO Analysis
Simplified illustrative leveraged buyout model — a single debt tranche, annual cash sweep and multiple-based exit. Not a full credit model.
Illustrative
Validation (5)
- Unable to calculate: current share price must be positive.
- Unable to calculate: shares outstanding must be positive.
- Shares outstanding must be positive.
- Unable to calculate: at least one comparable company is required.
- Unable to calculate: shares outstanding must be positive.
Transaction & Operating Assumptions
Assumption
Entry Enterprise Value
$2,133
Sources
| Debt Financing | $1,200 | 54.7% |
|---|---|---|
| Sponsor Equity | $993 | 45.3% |
| Total Sources | $2,193 | 100.0% |
Uses
| Purchase Enterprise Value | $2,133 | 97.3% |
|---|---|---|
| Transaction Fees | $60 | 2.7% |
| Other Uses | $0 | 0.0% |
| Total Uses | $2,193 | 100.0% |
Check passed: Total Sources = Total Uses.
Sponsor equity is the balancing item: Equity = Total Uses − Debt Financing.
Operating & Debt Schedule
All values calculated from the assumptions above
| $ in millions | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | $1,190.0 | $1,255.5 | $1,324.5 | $1,397.4 | $1,474.3 |
| EBITDA | $255.9 | $269.9 | $284.8 | $300.4 | $317.0 |
| EBITDA Margin | 21.5% | 21.5% | 21.5% | 21.5% | 21.5% |
| D&A | $59.5 | $62.8 | $66.2 | $69.9 | $73.7 |
| EBIT | $196.4 | $207.2 | $218.5 | $230.6 | $243.3 |
| Interest Expense | $102.0 | $96.6 | $90.2 | $82.6 | $73.9 |
| Taxes | $22.6 | $26.5 | $30.8 | $35.5 | $40.6 |
| Net Income | $71.7 | $84.0 | $97.6 | $112.4 | $128.7 |
| Less: Capex | ($59.5) | ($62.8) | ($66.2) | ($69.9) | ($73.7) |
| Less: Change in NWC | ($8.1) | ($8.5) | ($9.0) | ($9.5) | ($10.0) |
| Free Cash Flow | $63.6 | $75.5 | $88.6 | $103.0 | $118.7 |
| Debt — Beginning Balance | $1,200 | $1,136 | $1,061 | $972 | $869 |
| Debt Paydown | ($64) | ($76) | ($89) | ($103) | ($119) |
| Debt — Ending Balance | $1,136 | $1,061 | $972 | $869 | $751 |
| Net Debt / EBITDA | 4.4x | 3.9x | 3.4x | 2.9x | 2.4x |
Exit & Sponsor Returns
| Exit EBITDA | $317.0 |
|---|---|
| Exit Multiple | 9.0x |
| Exit Enterprise Value | $2,853 |
| Less: Remaining Debt | ($751) |
| Sponsor Equity Proceeds | $2,102 |
| Initial Equity Investment | $993 |
MOIC / Equity MultipleDerived
2.12x
IRRDerived
16.2%
5-year hold
Entry LeverageDerived
5.1x
Debt / Entry EBITDA
Equity % of CapitalizationDerived
45.3%
Projections and valuations shown here are estimates generated from user-defined assumptions. They are not guaranteed investment returns, not a forecast of actual results, and not investment advice. Historical data should be sourced from company filings or other reliable financial sources.