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Try This Valuable Valuation Tool

One of the many tools used to value a business is a Leveraged Buyout (LBO) model.  These models tend to be favorites of private equity/financial buyers, because valuation is driven primarily by the Return on Investment (ROI) that a company can generate.  For example, if a financial buyer pays too much for a company, their ROI will fall below acceptable levels.   This model will hold you to an acceptable level of ROI for a typical private equity group.  Please note, this ROI level changes with the marketplace, so a range of values will be generated upon completion.

Included in the Model
  • useful valuation indicators
  • minimum private equity Return on Investment (ROI) levels
  • a private equity cash flow forecast
  • proposed debt structuring and expense levels

This model is often used in combination with other analysis performed by your investment banker to develop a thorough value for the business. Because it doesn't look at industry specific events, synergies, or company characteristics other than growth, investment bankers tend to use this model as a "soft floor" for value.  

We invite you to take the model for a spin!  It's a great way to see how different company metrics can drive valuation.  If after you check this model out, you'd like to have a more in-depth conversation about value and what role the LBO model plays in overall company valuation, please give us a call. 

Download FREE Spreadsheet

Enter your details below to download this professional level model.

The professionals at TKO Miller were experts at the transaction issues that arose when I bought S.R. Sales.  However, they also brought to the table the ability to deal with issues such as understanding family dynamics and personalities.  Without their experience in both the technical and emotional areas of a transaction, it would never have been completed.

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John Steindorf
- CEO & President S.R. Sales Company