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Leveraged Buyout (LBO)  Excel Financial Projection Model

Highly versatile and user-friendly financial model to project and analyse the financial outcomes of a leveraged buyout (LBO) transaction


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User-friendly financial model to project and analyse the financial outcomes of a Leveraged buyout (LBO) transaction. The model enables the user to project the financial performance and position (3-statement financial forecast) and investor IRR over a 5-year period post LBO transaction including any revenue and cost changes/improvements expected to be generated under the new ownership.


The model also enables the user to qualify the intrinsic value of the business pre and post LBO transaction using the discounted cashflow (DCF) approach. The model compares these outputs in a dashboard to help the user calculate and understand the financial feasibility of the LBO transaction including, amongst others:

  • Equity and debt investor IRR

  • IRR sensitivity to offer premium and exit multiple

  • Sources and uses of funds

  • Transaction details and financing requirements

  • Projected revenue, EBITDA and net profit performance pre and post LBO transaction

  • Intrinsic enterprise and equity values before and after the transaction

  • Gearing, ROE and margin development pre and post LBO transaction


The model includes 3 scenarios for post-LBO revenue and cost changes/improvements and projected financial statements both pre and post LBO transaction showing goodwill and impact changes in capital structure.  


  • Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) across 5 years presented on a yearly basis for the company pre and post LBO transaction;

  • Discounted cash flow valuation using the projected cash flow output pre and post LBO transaction

  • Ratio Analysis based on projected financial statements

  • Summarised tables and charts showing:

    • Key transaction details including offer price, financing requirements, sources and uses of funds

    • Investor cumulative net cash flow and IRR by projection year

    • IRR sensitivity to offer premium and exit multiple

    • Key performance metrics and ratio comparison between pre and post LBO company including revenue growth, EBITDA, net profit, margin, ROE and debt to equity ratios)

    • Key valuation comparison pre and post LBO transaction


Setup Inputs:

  • Names of transaction and company;

  • Currency;

  • Transaction close period;

  • Naming for post-LBO scenarios;

  • Naming for debt and equity sources of funds for LBO transaction.


Pre-LBO Projection Inputs:

  • Latest P&L and balance sheet actuals;

  • Forecast revenue;

  • Forecast cost of sales;

  • Forecast operating expenses including depreciation;

  • Fixed asset additions;

  • Borrowing additions/repayments;

  • Dividend distributions;

  • Tax rate and interest rates;

  • Debtor and creditor days;

  • Inventory percentage of cost of sales;

  • Discount rate and terminal growth rate.


Post-LBO Inputs:

  • Financing details including offer premium, transaction fees, working capital requirement, capex investment, contributions by each debt and equity investor

  • Capex investments and useful lives

  • Goodwill amortisation (if applicable)

  • Post-LBO exit multiples, discount rate and terminal value growth rate

  • LBO-driven changes/improvements (revenue increases, cost reductions, dividend distributions) for each scenario

  • Pro-forma opening balance sheet adjustments.


The model comprises of 8 tabs split into input ('i_'), calculation ('c_'), output ('o_’) and system tabs. The tabs to be populated by the user are the input tabs which include ‘i_Setup’ for model and transaction general assumptions and ‘i_Pre_LBO’ for specific projection assumptions relating to the company pre-LBO and ‘i_Post_LBO’ for the detailed LBO related assumptions. The calculation tabs uses the user-defined inputs to calculate and produce the projection outputs which are presented in the calculation tabs and ‘o_Dashboard’ tab.

System tabs include:

  • A 'Front Sheet' containing a disclaimer, instructions and contents;

  • A checks dashboard containing a summary of checks by tab.


  • The model follows good practice financial modelling guidelines and includes instructions, checks and input validations to help ensure input fields are populated accurately;

  • The model enables the user to prepare projections for the company on a pre and post-LBO basis;

  • The model includes the possibility to model 3 scenarios for LBO-driven changes/improvements with a drop down in the dashboard tab to change scenario.

  • The model is not password protected and can be modified as required following download;

  • The model is reviewed using specialised model audit software to help reduce risk of formula inconsistencies;

  • Apart from projecting revenue and costs the model includes the possibility to model receivables and payables, inventory, fixed assets, borrowings, dividends and corporate tax;

  • Business names, currency and transaction close date are fully customisable;

  • The model included an integrated discounted cash flow valuation for the company on a pre and post-LBO basis;

  • The model includes up to 6 separate debt and 6 separate equity investors financing the LBO transactions with IRR calculations computed for each equity investor across the projection period.

  • The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.

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