LBO Model in Excel — Leveraged Buyout Template with IRR, MOIC and Returns Bridge

What this model does

A leveraged buyout is the purchase of a company with a large share of borrowed money, repaid from the company's own cash flow. Banks lend against EBITDA, not against the price, so the model sizes both debt layers as multiples of EBITDA: a senior term loan with scheduled amortisation and a cash sweep that prepays it from every spare dollar above minimum cash, and subordinated notes at a higher rate, repaid in full at exit. Sponsor equity is whatever the debt does not cover.

The operating model runs revenue, EBITDA, depreciation, capex, working capital and tax for FY2026–FY2030 down to free cash flow. Interest is charged on opening balances, so there is no circular reference to break. With the sample deal — 8.0x EBITDA in and out, 5.0x leverage — the sponsor earns about a 24% IRR and 2.9x its money. The returns bridge splits that gain into EBITDA growth, multiple change, debt paydown, cash build-up and fees, and a grid shows the IRR at five entry and five exit multiples.

Use it for

• Learning LBO mechanics for private equity, investment banking or transaction-advisory interviews
• A quick returns check on a buyout or management buy-in
• Seeing how price, leverage, growth and margins each move IRR and MOIC

Inside the workbook

1. Cover — What the model does, a contents list linking every sheet, and the checks to watch.
2. Inputs — Only the yellow cells: price, fees, minimum cash, both debt layers, the five-year plan and the exit multiple.
3. Sources & Uses — How the deal is funded, with sponsor equity as the balancing figure and a check.
4. Operating Model — P&L to free cash flow for FY2026–FY2030.
5. Debt Schedule — Mandatory amortisation, cash sweep, interest and net debt / EBITDA by year, with a minimum-cash check.
6. Returns — Exit equity, IRR, MOIC and the value creation bridge, with a check that the bridge ties.
7. Sensitivity — IRR across entry and exit multiples — every cell a live formula.

Who this model is for

• Candidates preparing for private equity and investment banking interviews
• Finance professionals and CFOs evaluating a buyout or acquisition
• Students learning leverage, cash sweeps and returns analysis

Frequently asked questions

Keep going on findi360

• DATA DARE Group Consolidation: Subsidiaries, NCI & Intercompany DD-CON-002 · L2 — CSV / ~30,000 rows Multi-Currency Consolidation: Translation, Loans & Unrealised Profit DD-CON-003 · L3 — Parquet / ~500,000 rows
• DATA DRILL Test yourself — Power BI practice questions One question at a time, or a 50-question timed simulation.
• COURSE Courses and free recordings Power BI, Python and finance courses for finance professionals.

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