A free LBO model template in Excel, with a complete worked deal
Sources and uses, a two-tranche debt schedule, taxes, the three statements, covenants, exit and sponsor returns: twelve linked sheets, one fictional deal, no macros.
The file models one leveraged buyout from signing to exit. A sponsor buys Kestrel for $450 million, 9.0 times $50 million of EBITDA, with a $225 million first-lien term loan, a $50 million second lien and $200 million of equity. Five years later it earns 17.05% on its money and 2.20 times what it put in. Every one of those numbers is a formula you can move.
Download the template
One Excel file, no macros, nothing locked. No account, no email address.
Twelve sheets, in the order the calculation runs. Inputs are blue type on a yellow fill and sit on one sheet; everything else is a formula.
Assumptions
Every input in one place: price, fees, the two debt tranches and their pricing, the operating plan, the holding period.
Sources_Uses
The price, the refinancing of existing debt, both kinds of fees, the cash left on the balance sheet, and the equity as the balancing item. A line that must read zero proves sources equal uses.
Operating
Revenue to EBITDA year by year.
Debt
Both tranches and the revolver: interest on opening balances, mandatory amortisation, a cash sweep that steps down with net leverage, and a revolver drawn only to hold minimum cash.
Tax
Cash taxes after interest, so the tax shield of the debt is in the numbers rather than assumed.
Cash_Flow and Balance_Sheet
Free cash flow and a balance sheet that balances every year.
Covenants
Leverage and coverage tested against their levels, with the headroom shown.
Exit
Exit value, net debt at exit and the equity bridge.
Returns
Sponsor flows by year, IRR on annual flows and by XIRR on dated flows, the multiple, and where the gain came from.
Checks
Every figure the book prints set against what the model computes, with a verdict on each line.
What the worked deal returns
Measure
Value
Enterprise value at entry
$450m (9.0x EBITDA)
Total debt at closing
$275m (5.5x EBITDA)
Sponsor equity
$190m
Sponsor IRR, annual flows
17.05%
Sponsor IRR, XIRR on dates
17.04%
Sponsor multiple of money
2.20x
Cumulative free cash flow over the hold
$88.1m
Cumulative cash interest
$126.5m
Net debt paid down
$35.3m
EBITDA growth, compounded
9.25%
Read the last lines together. Over the hold the company pays $126.5 million of interest and $38.7 million of tax, and still repays $35.3 million of net debt.
But the gain in enterprise value is 55.6% of the entry price: most of the return comes from EBITDA growth, not from paying down debt.
That is the split an investment committee should ask for, and the Returns sheet prints it.
How to use it on your own deal
Open Assumptions and overwrite the blue cells: EBITDA, entry multiple, fees, the tranche sizes and pricing, the plan.
Look at Sources_Uses first. If the check line is not zero, an input is inconsistent.
Read Covenants before Returns. A deal that breaks its leverage test in year two has no return worth reading.
Change the holding period on Assumptions: Exit and Returns follow it.
Keep the Checks sheet: once you change inputs it stops matching the book, which is expected. Use its structure for your own tie-outs.
Questions people ask about it
Is this LBO model really free?
Yes. It is a companion file to a book. There is no sign-up, no email address and no paid version.
Does it use macros or circular references?
No macros and no circular reference: interest is charged on opening balances, which the model already knows at the start of each year. The file recalculates in Excel, LibreOffice or Google Sheets without iterative calculation.
Why two different IRRs?
Annual flows put every cash flow on a year end. XIRR uses the actual dates. On this deal they give 17.05% and 17.04%; on a deal with interim dividends the gap can matter.
Can I use it for a real transaction?
You can reuse the structure. The deal, the company and every figure in it are fictional, and nothing here is investment advice.
The rest of the files
This template is one of the companion files for The Buyout Investor: the full set adds
the deal-to-fund bridge, the returns and sensitivities workbook and the 60-minute test. Free, like this one.