Services / LBO Modeling
LBO Modeling Services for Acquisitions
A fully built leveraged buyout model covering returns, debt paydown and sensitivity cases for your target acquisition.
What LBO Modeling is
A leveraged buyout model answers one question: at this price and with this capital structure, what return does the equity earn, and how much has to go right for it to get there. The purchase is financed with a mix of debt and equity, the company's own cash flow services and repays the debt, and the equity return comes from three places: growth in earnings, repayment of debt, and any change in the valuation multiple between entry and exit.
A model is only as good as the earnings it starts from. If the EBITDA at the top of the model includes addbacks that would not survive diligence, every return figure below it is overstated by the same proportion, and leverage magnifies the error. That is why an LBO model is best built on earnings that have been examined, not on a seller's summary.
What the engagement covers
- Sources and uses
- How the purchase price, fees and any refinancing are funded, and what each layer of capital contributes.
- Debt schedule
- Each tranche with its rate and terms, mandatory amortization, cash available for debt service and the resulting paydown year by year.
- Operating projections
- Revenue, margin and working-capital assumptions that tie to the historical financial statements you provide.
- Returns
- Equity IRR and multiple of invested capital at exit, with the contribution from earnings growth, debt paydown and multiple change shown separately.
- Sensitivity cases
- How returns move with purchase price, leverage, growth and exit multiple, so the decision does not rest on a single case.
Who it is for
Independent sponsors, searchers, private equity teams and lenders evaluating a leveraged acquisition, and owners who want to see their business the way a financial buyer will.
How an engagement works
- 01
Scope
Choose the service and confirm the scope and CPA sign-off for your engagement at intake.
- 02
Share the evidence
Provide the financial statements, ledger detail and deal documents the engagement needs through a secure workspace.
- 03
Analysis
The work runs on Finsider's diligence software, which traces reported figures back to source records.
- 04
Reviewed deliverable
You receive a deliverable that has been through professional review, with the evidence behind its findings.
What we need from you
Required to start
- P&L: last 3 fiscal years + YTDMonthly detail preferred.
- Balance sheets: last 3 fiscal years + YTD
- Model purposeWhat decision the model supports: fundraise, acquisition, budgeting, etc.
- Target purchase price
Helpful if available
- Cash flow statements: last 3 fiscal years + YTDIf not produced, we can derive from the GL.
- Trial balance / GL exportFull general ledger export covering the same periods.
- Key assumptionsGrowth, pricing, hiring, margins: anything already decided.
- Proposed debt structureSenior/mezz/seller note split, rates, and terms if known.
- Sponsor return targetse.g. 25% IRR / 3x MOIC over 5 years.
- LOI / IOIDraft or signed letter of intent, if available.
Questions
What do you need to build the model?
Profit and loss statements and balance sheets for the last three fiscal years plus the year to date, the target purchase price, and the purpose of the model. A general ledger export, the proposed debt structure, return targets and a letter of intent make the model sharper but are not required to start.
Can the model use adjusted EBITDA from a Quality of Earnings report?
Yes. Building the model on diligenced earnings is the stronger approach, and a Quality of Earnings engagement can run alongside or before the model.
Is the debt structure fixed before you start?
No. If the structure is not yet agreed, the model can compare alternatives so you can see how each one changes returns and debt service cover.