Advanced LBO Modelling

Name: Advanced LBO Modelling
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Master the key elements of modelling in an LBO Analysis

Modern architecture in the heart of a city with many windows that create a sense of light

A two-day leveraged buyout course

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In-house pricing available – often more cost-effective for teams of 10+

Download: Course Outline

Day One

Advanced LBO training is delivered across five focused sessions, each building the practical modelling skills required to structure, analyse, and evaluate leveraged buyouts with confidence.

Session 1 – Short Form LBO Model

Forecasting the unlevered free cash flow from operating data
Deal Terms: Offer Price and Enterprise Value; Sources & Uses of Funds
Allocating cash flows to repay debt using a simple cash sweep
Linking up the interest expense
Exit returns and sensitivity analysis of equity returns vs. entry multiple, leverage and exit multiple
Exercise – complete a Short Form LBO model

Session 2 - Leveraged Buyout Model – Equity Value Creation

This LBO course analyses the components for equity value creation
Decomposing value creation into revenue growth, EBITDA margin improvements, debt repayment, multiple expansion, and deal fees
Build a bridge chart to show absolute amounts of value creation and Multiples of Invested Capital
Exercise: Building a Value Creation Bridge, both absolute and Money Multiple-based

Session 3 - Completion Mechanisms and Deal Adjustments

Contrasts Locked-Box vs. Completion Account Mechanisms
Reconciling Enterprise Value to Actual Equity Purchase Price
‘Normal’ OWC
Book Value vs. Fair Value adjustments
Under/(over) spend on Capex
Debt-like liabilities
Locked-box roll forward concludes session 3 of leveraged buyout training, and ahead of the next exercise
Exercise: Estimate the Equity Purchase Price after deal adjustments for Completion Accounts and Locked-Box deals.

Session 4 – LBO Debt Financing and Debt Capacity

Debt capacity analysis
Determining a maximum debt capacity using unlevered free cash flows
Amortising Senior Loan
Bullet subordinated tranches
Mezzanine
Exercise: Determine the level of debt the company could obtain

Session 5 – Modelling a Debt Waterfall

As the final session of day one, this module brings together the core concepts covered so far. We focus on how cash is prioritised, allocated, and constrained within a full debt waterfall structure as part of an advanced LBO Modelling course.

Estimating unlevered free cash flow
Cash flow available for debt service vs. Cash Flow available for debt repayments
Mandatory Repayments: straight-line amortisation, balloon and bullet repayments
The issuance/repayment of a revolver
Cash available after mandatory repayments and revolver
Covenant-based constraints on cash distributions to equity investors
Accelerated/ discretionary repayments
Final Day One Exercise: Build a full debt waterfall model, with mandatory repayments, revolving credit facility, discretionary repayments and equity distributions.

Day Two

Day Two, also split into five sessions, starts by building on the foundations established during Day One. LBO financial modelling training focuses on constructing a fully integrated, long-form LBO model through a detailed case study:

Session 6 – Building a Long Form Model – LBO Case Study

Deal Assumptions: Equity Offer Value and Enterprise Value
Sources and uses of funds with senior, subordinated, mezzanine, shareholder loan and sweet equity
Calculating deal Goodwill and building a consolidated balance sheet
Integrating an Operating Model with NewCo Finance Structure
Create a debt waterfall with mandatory repayments, a revolving credit facility, and a covenant-based cash sweep
Current and deferred taxation, given limitations on the tax deductibility of debt
Determine the key ratios
Exit enterprise value and bridge to equity value
Value creation schedule with a value creation bridge
Internal rates of return for all investors
Sensitivity analysis concludes session 6 of the LBO model training

Session 7 – LBO Management Incentive Structure

Ratchet Share Mechanisms vs. Sweet Equity
Calculation of risk and rewards: IRR and Money Multiples
Exercise: Contrasting RSM vs Sweet Equity with varying IRRs.

Session 8 – Leveraged Recapitalisations – Case Study

Benefits of a leveraged recapitalisation
Recapitalised Source and the use of an LBO funds schedule
Assumptions – interest and new debt capacity
Integrating the new debt funding within a waterfall
Integrating the new interest rates post-recapitalisation
Exit values and IRR, with and without the recap
Value creation schedule with a value creation bridge
Exercise: Incorporating a Leveraged Recap within an existing LBO Model

Session 9 – Buy-and-Build LBO Modelling

Modelling and integrating a bolt-on acquisition within an existing platform business model begins this session of LBO training
Bolt-on Enterprise Value and Equity Value
Bolt-on sources & uses of funds
Flexing the completion date and pro-rating bolt-on cash flows
Integrating the Bolt-on Income statement and cash flow within a short-form platform model
Analysing exit returns and value creation from the bolt-on
Exercise: Incorporating a Bolt-on Acquisition within an existing LBO Model

Session 10 – Structure of PE Funds: GP vs. LP Returns

The life cycle of a PE fund: Investment, Development & Harvesting Phases
Measuring Fund Performance: % PI, DPI, RVPI, IRR vs. TVPI
Fund vs. GP vs. LP returns: carried interest & catch-ups
American vs. European Funds
Exercises: Calculating Performance Ratios, IRRs and Multiples for Funds and GPs

After graduating from the University of Cambridge in 1993, our LBO modelling course expert began his career as an auditor at Arthur Andersen. Here, he developed a strong foundation in corporate accounting and financial statement analysis. He later qualified as a Chartered Accountant (ACA) and transitioned into investment banking in the City of London, holding roles at both HSBC and Merrill Lynch.

During his time in London, this expert held a front-office role advising companies on valuation, financing, acquisitions, foreign exchange, and derivatives. His broad practical experience, combined with a strong passion for sharing knowledge, naturally led him to pursue a career in training.

Over the past decade, our LBO course expert has specialised in delivering high-impact financial training across a broad range of subjects, with particular expertise in leveraged buyouts. He brings extensive experience across financial modelling, corporate finance, valuation, and capital markets. He has trained professionals at investment banks, private equity firms, and corporate finance teams globally, making him ideal for delivering this session.

Delivered across two days, Advanced Leveraged Buyout Training at Redcliffe provides a comprehensive, hands-on approach to building and analysing sophisticated LBO models. Sessions equip participants with the technical skills and judgement required to structure and evaluate complex transactions:

Build an LBO model incorporating complex debt structures
Assess the impact of the LBO financing structure, with a focus on key structuring considerations and their implications
Estimate debt capacity
Identify potential adjustments in determining an appropriate equity purchase price based on a business enterprise value
LBO training ensures participants complete a fully integrated LBO model with:
- Deal Terms
- Source and use of LBO funds
- Integrated financial statements
- Detailed debt waterfall, allocating cash flows across a debt structure with potential for dividend distributions
- Equity value bridge charts illustrating components of value creation
- Sensitivity analysis

Redcliffe’s advanced LBO course is a must-know for:

Corporate Finance professionals across all levels, particularly those involved in private equity transactions.
Private equity practitioners responsible for executing or overseeing LBO deals.
Finance professionals within portfolio companies seeking a clearer understanding of the LBO process and their role within a private equity structure.

This Advanced LBO Modelling course at Redcliffe Training begins with an introduction to a rapid approach for assessing LBO opportunities. This foundation ensures participants grasp the core concepts before progressing to more advanced modelling techniques.

LBO financing structures and debt capacity are explored, and sessions review equity, pure debt, and mezzanine finance.

Sessions focus on constructing a detailed debt waterfall and building an advanced LBO model from first principles, including NewCo/OpCo consolidation and a fully integrated financial forecast. This leveraged buyout course at Redcliffe Training also explores modelling a leveraged recapitalisation and the strategic benefits this can deliver.

The trainer was extremely well-versed on the subject matter and was able to answer all our queries practically via Excel examples, which is fantastic for those looking to master the modelling aspect of LBOs.
Good interaction with the teacher, very user-friendly and organised models.
The trainer was brilliant in the delivery of the course. The content was completely relevant, and the "hand-outs" were spot on.
Fantastic tutor, who provided a great walkthrough of complex modelling and learn new Excel skills.
The trainer was fantastic!
The course content was very relevant for PE professionals, and the trainer did a great job as an instructor.
Great course, and the models were very useful and will help us with our models going forward.

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(min. 50 participants)