Returns when LBO modelling

Here are some suggestions as to how returns could be laid out and calculated when LBO modelling.

Answer to LBO modelling course question on calculating returns

Most of the numbers above we calculated previously.  Here we are assuming that:

  • The business could be sold at an enterprise value of 28.0.  EBITDA of 4.0 x 7 = 28.0 – see note (i) in the table above.
  • Net proceeds to shareholders would be 17.0.  28.0 minus 10.0 debt = 18.0 shares valuation, minus 1.0 fees = 17.0 net proceeds.  See note (ii) in the table above.

You can download a spreadsheet showing the LBO modelling structure, and the calculation of returns.

Return to the LBO modelling course

Click here to return to the section of the LBO course dealing with modelling returns.  Please click here to continue with the private equity LBO modelling training, or you can find out more about our LBO course.