LBO modeling
LBO Introduction In this post, I'll try to explain the mechanics of LBO modeling and provide you with the excel model and presentation that I had created for one of the competitions during my B-School. (Files are at the end of the post). The main idea is that private equity companies are looking to invest in certain companies via a mix of equity and debt (debt is generally about 70%-80%) to make high returns. Most PE firms specialize in a few industries and try to make investments within the same. But at the end of the day, the main goal of a PE firm is to stay invested for 3-5 years, make some good returns (IRR) and move out. I would strongly recommend reading this article if you are completely new to LBOs. Case Overview: Now I'll briefly explain the problem statement that was given- A Private Equity firm (HNZ Capital) is looking to invest in one of the three companies via the LBO route. The three companies are: Flowserve Treehouse ASGN Question Set- Which company should HNZ...