Reusable LBO Model

CLIENT: Private Equity Firm

A private equity firm based in the US contacted Sapling to generate a custom LBO model template, which could be reused over the course of a few years. Given the small size of the firm, the company wanted the model so they did not have to spend critical time customizing prior models or creating models from scratch, and could instead deploy an LBO template already available in a fast and accurate manner.

3 Key Insights:

The model was built with the typical LBO components seen in the client’s prior used models. By request, the model’s starting balance sheet and income statement has a separate tab where historical data can be entered in either statement or trial balance format. Revenue and expense forecasts are then driven off historical data using inputted growth rates

The model allows for the setting of custom scenarios for both financial assumptions (entry and exit multiples, debt amounts, etc.), as well as operating assumptions (base, high, low, and bank case revenue and expense forecasts)

The model allows for three different entities to be included in the initial purchase, which rolled up into one consolidated entity at time of model start. This gave more flexibility as it was something the client frequently dealt with in prior deals

EXAMPLE: Metrics by Investor

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