LBO & Paper LBO
How do you size the equity check in a paper LBO's sources & uses, and what's commonly left out for simplicity?
Model answer
Uses = purchase enterprise value (+ transaction fees + financing fees + minimum cash, in a full model). Sources = new debt raised + sponsor equity (plug). So sponsor equity = total uses - debt. In a…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from LBO & Paper LBO
- What is a leveraged buyout?
- What makes a company a good LBO candidate?
- What drives returns in an LBO?
- Why does using more leverage increase equity returns (when it works)?
- At a high level, how do you calculate the IRR or money multiple on an LBO?
- Name the three primary value-creation (returns) drivers in an LBO.