Leveraged buyout (LBO) is the purchase of all or substantially all of a company using large amount of debt. Since the 1960s, LBO has been the primary investment strategy of private equity firms, such as KKR, Blackstone and TPG. The use of debt to fund the buyout offers compelling benefits to investors, such as increased spending power and enhanced IRR potential. In this course, we’ll not only learn how LBO works conceptually, but we’ll also learn how to build LBO models in Excel like how they are built at the private equity firms and how you’ll need to build them in many private equity interviews.
Key Takeaways:
- Why private equity investors use leverage
- How the debt schedule works
- How to build a LBO model in Excel