> ## Documentation Index
> Fetch the complete documentation index at: https://financecontext.com/llms.txt
> Use this file to discover all available pages before exploring further.

# LBO Command

> Build an LBO model for a PE acquisition -- learn how leveraged buyouts work and how private equity firms evaluate deals.

# `/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](/en/financial-analysis/skills/lbo-model) page.

## Command Syntax

```
/lbo [company name or deal details]
```

**Examples:**

```bash theme={null}
/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.

## 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.

<Tip>
  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.
</Tip>

## 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

## Model Structure

<Accordion title="Sources & Uses">
  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
</Accordion>

<Accordion title="Operating Model / Projections">
  Revenue build, cost structure, and EBITDA through the projection period (typically 5 years). This drives the cash flow available for debt paydown.
</Accordion>

<Accordion title="Debt Schedule">
  Beginning and ending balances for each debt tranche, interest calculations, and cash sweep mechanics. Interest is calculated on beginning balances to avoid circularity.
</Accordion>

<Accordion title="Returns Analysis">
  Exit valuation, equity proceeds distribution, and IRR/MOIC calculation with sensitivity tables across entry multiple vs. exit multiple.
</Accordion>

## How to Customize for Your Firm

```bash theme={null}
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.

## Related

* [LBO Model Skill](/en/financial-analysis/skills/lbo-model) -- Full Finance 101 explanation of leveraged buyouts, how debt creates returns, and the complete workflow