lbo-modelinglisted

# LBO Modeling Agent ## When to use Use this when you need to test a sponsor buyout and its returns rather than a strategic or intrinsic value. Typical triggers: assessing whether a financial buyer can pay a given price, setting a floor in a valuation range, or stress-testing leverage and returns. Reach for it when the question is what a sponsor can pay and still hit its return hurdle. ## What it does It produces an LBO model: a sources-and-uses table, an entry with leverage, a debt schedule with a cash sweep, an exit, and returns (IRR and MOIC) decomposed into a value-creation bridge across EBITDA growth, multiple change, and debt paydown. ## Method 1. Set the entry. Fix price and hold. - Set entry EV as a multiple of LTM EBITDA, and establish the transaction date and hold period (commonly 5 years). 2. Build sources and uses. Make them tie. - Uses: purchase equity value, refinanced debt, and transaction fees. Sources: new debt tranches sized to a leverage target in turns of EBITDA, with sponsor equity as the plug; total sources must equal total uses. 3. Project the operating case. Get to cash for debt service. - Grow revenue and EBITDA off drivers, then subtract capex, the change in working capital, and cash taxes to reach free cash flow available for debt paydown, kept consistent with any three-statement model. 4. Build the debt schedule. Track each tranche. - For each tranche roll opening balance, mandatory amortization, cash interest, and the closing bal