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/lbo — LBO Model

A leveraged buyout (LBO) is how private equity firms acquire companies: they use a combination of their own money (equity) and borrowed money (debt) to buy a business, improve it over 3-7 years, and sell it for a profit. The LBO model is the analytical tool that determines whether a deal makes financial sense — specifically, whether the expected returns (measured by IRR and MOIC) meet the firm’s investment hurdles. This command builds an investment banking-quality LBO model with Sources & Uses, Operating Projections, Debt Schedule, and Returns Analysis. It is the standard deliverable for PE deal teams evaluating potential acquisitions. For a deep dive into LBO concepts (how debt creates returns, the LBO math, IRR/MOIC), see the LBO Model Skill page.

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Command Syntax

/lbo [company name or deal details]
Examples: 
/lbo Acme Corporation
/lbo "Project Atlas - $500M revenue software company"
/lbo
If no argument is provided, Claude will ask for the target company and deal parameters.

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What It Produces

A complete LBO model in Excel (.xlsx) with four core sections: Sources & Uses, Operating Model, Debt Schedule, and Returns Analysis with sensitivity tables.
If you have an existing LBO template (.xlsx), provide the file path as part of your request. Claude will use your template’s exact structure rather than building from scratch.

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Key Inputs Required

Claude will ask for the following deal parameters if not provided:
  • Target company — Name and basic description
  • Purchase price / entry multiple — EV or EV/EBITDA entry multiple
  • Revenue and EBITDA — Current financials (LTM)
  • Debt structure — Leverage multiples by tranche (Senior, Sub, Mezz)
  • Projection assumptions — Revenue growth, margin trajectory
  • Exit assumptions — Hold period, exit multiple or exit EBITDA
  • Management rollover — If applicable

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Model Structure

The transaction financing structure — how the deal is funded and how proceeds are applied. Sources must equal Uses (this is the fundamental balancing equation).
  • Sources: Equity contribution, Senior Secured, Senior Unsecured, Mezz/Sub debt
  • Uses: Equity purchase price, transaction fees, financing fees, balance sheet cash
Revenue build, cost structure, and EBITDA through the projection period (typically 5 years). This drives the cash flow available for debt paydown.
Beginning and ending balances for each debt tranche, interest calculations, and cash sweep mechanics. Interest is calculated on beginning balances to avoid circularity.
Exit valuation, equity proceeds distribution, and IRR/MOIC calculation with sensitivity tables across entry multiple vs. exit multiple.

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How to Customize for Your Firm

claude plugin install financial-analysis@financial-services-plugins
Edit skills/lbo-model/SKILL.md to add your firm’s debt structure defaults, returns thresholds, and presentation conventions.
  • LBO Model Skill — Full Finance 101 explanation of leveraged buyouts, how debt creates returns, and the complete workflow