TVS 016 – Leveraged Buy Outs

Hope everyone had a great labor day weekend! Today we are going to be talking about Leveraged Buy Outs, another form of valuation and modeling. As promised, please see a link to the actual model of an LBO, and a more detailed explanation in case you are interested.

LBO Model

LBO Detailed Overview

1. LBO Drivers
   • Purchase Price
   • Debt Quantum
   • Interest Rate
   • Synergies
   • Exit Price
   • Dividend Recap 
2. Walk through of an LBO
3. Types of companies that are good LBO Candidates
   • High Cash Flow Generating
   • Stable and predictable business
   • Companies where you can cut costs
   • Low CapEx business
4. How buying a home is similar to an LBO transaction

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at alan@thevampiresquid.com or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

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