Leveraged Buyout Model

Document Sample
Leveraged Buyout Model Powered By Docstoc
					                                   LEVERAGED BUYOUT MODEL
            The acquisition of another company using a significant amount of borrowed money (bonds or
            loans) to meet the cost of an acquisition is referred to as a Leveraged Buyout (LBO). A
            Leveraged Buyout model is used to determine an implied valuation range for a given target in
            a potential LBO sale based on achieving acceptable returns.

            Instructions:
            Enter the required input values on "Inputs" tab and the assumptions in the "Assumptions" tab
            of this workbook. Once the required inputs have been made, the results of the analysis will be
            displayed on the "LBO" tab. The model assumes an exit will be made at the end of 5th year
            following the sale.




© Copyright 2013 Docstoc Inc.                                                                                1
© Copyright 2013 Docstoc Inc.   2
INPUTS

       Acquisition Price        940,000


       % Debt                        60


       % Equity                      40


       Interest Rate                  6




© Copyright 2013 Docstoc Inc.             3
ASSUMPTIONS

                                  Year 1         Year 2     Year 3      Year 4      Year 5
Revenue                            1,098,000      #######    #######     #######     #######
EBITDA                              158,000       175,000    188,000     195,000     204,000
Outstanding Debt                    564,000       455,840    324,190     171,642        2,940
Interest Expense                        33,840     27,350     19,451      10,299         176
Capex                                   12,000     12,000     12,000      12,000      12,000
Increase in NWC                          4,000      4,000       4,000       4,000       4,000


Cash Available for Amortization     108,160       131,650    152,549     168,701     187,824


Exit EBITDA Multiple              12x




© Copyright 2013 Docstoc Inc.                                                                   4
LBO OUTPUT

Cash at End of 5th Year          184,883
Cash from Sell-Off              2,448,000


Tota
				
DOCUMENT INFO
Shared By:
Tags:
Stats:
views:380
posted:1/10/2012
language:Unknown
pages:5
Description: This Leveraged Buyout Model sets forth a spreadsheet that can be used to analyze a potential acquisition using debt. A leveraged buyout (LBO) refers to the acquisition of another company using a significant amount of leverage (debt such as bonds or loans) to finance the acquisition costs. A Leveraged Buyout Model is used to determine an implied valuation range for a given acquisition target based on the purchaser's desire to achieve certain returns. This spreadsheet comes with instructions on how to populate the inputs and assumptions in order for the model to calculate the LBO Output.