# The Buyout Investor: companion files

By Julian R. Sterling. These files are served at julianrsterling.com/buyouts. No sign-up, no email is asked for.

The workbooks follow one fictional buyout fund (Halden Capital Partners, Fund IV) through one fictional deal: Kestrel Fluid Systems, bought at 9.0x EBITDA with 5.5x of debt, held five years, with an add-on at the end of year 2 and a bad year 3. Every company, fund, lender and person in them is fictional. Prices, plans, debt terms, fees and paths are the book's assumptions, not market statistics. Nothing here is investment, legal or tax advice.

## What is in the pack

| File | What it is | Where in the book |
|---|---|---|
| `Kestrel_LBO_Model.xlsx` | The deal from closing to exit: assumptions, sources and uses, the operating plan, the debt schedule with interest on opening balances and the cash sweep, tax with the interest cap, a balance sheet that closes every year, the covenant tests, the exit waterfall with the option pool, the sponsor's returns by annual and by dated flows. | Chapters 3 to 10, 12 and 14 |
| `Kestrel_Returns_and_Sensitivities.xlsx` | The returns bridge and every sensitivity and scenario: exit multiple, entry price (debt held constant, and the wrong version), leverage, holding period, plan delivered, the two-way grid, the add-on, the bad year with its cure and its amendment, the recap, the unitranche, rates, the all-equity purchase, each as its own live case. | Chapters 1, 6, 11 to 13, 15, 16 and 19 |
| `Kestrel_Deal_to_Fund.xlsx` | The subscriber's side: commitments, management fees, the preferred return, the catch-up and the carry, net flows with and without a subscription line, the gross-to-net table. | Chapters 17 and 18 |
| `Blank_Templates.xlsx` | Four working sheets with every input empty: sources and uses, a five-year one-page model, a returns bridge, a deal-to-fund sheet. | Chapters 5, 7, 15 and 17 |
| `Buyout_Investor_60_Minute_Test.xlsx` | A separate, simpler deal to work against the clock: build the fifteen answers, then open the Score sheet and the Answer Key. | The whole book |

## Recommended order

1. Open `Kestrel_LBO_Model.xlsx` and read Sources_Uses, then Debt and Covenants: the fund put in $190.0 million beside $275.0 million of debt, and the year-3 covenant held by 0.12x.
2. Open `Kestrel_Returns_and_Sensitivities.xlsx`: the bridge ($250.4 million of EBITDA growth, $35.3 million of deleveraging, no multiple change, -$25.5 million of fees) and then the exit multiple table beside it.
3. Open `Kestrel_Deal_to_Fund.xlsx`: 17.05 percent for the deal, 12.70 percent for the subscriber, 14.39 percent with a subscription line.
4. Take the 60-minute test once you have read Part IV.
5. Use `Blank_Templates.xlsx` on your own deal. Save a copy first.

## Working rules

- Yellow cells with blue type are inputs; grey cells are formulas. Change an input and every figure that depends on it moves.
- Each worked workbook ends with a Checks sheet that sets every figure the book prints beside the live cell that computes it, with the numeric difference and a tolerance of half a unit of the last printed digit, plus the logic checks: sources equal uses, the balance sheet closes every year, closing debt equals opening debt less repayments plus draws, the bridge adds to the gain, the IRR by dated flows equals the annual IRR, the subscriber's net is below the deal's gross. The overall status reads PASS only if every check passes; an error counts as a failure. Read the difference, not only the word.
- Interest and fees are computed on opening balances: no circular reference, no iterative calculation, in any file.
- No macros, no external links, nothing hidden or locked. The files recalculate in Excel, LibreOffice or Google Sheets.

Julian R. Sterling, julianrsterling.com/buyouts