02 / UNDERSTAND THE RETURN
Where sponsor profit comes from
Operating improvement, valuation and debt repayment contribute separately. Fees reduce the result.
Adds to profitReduces profitSponsor profit
LEVERAGED BUYOUT / SPONSOR RETURNS
Build the deal.
Test the return.
Price matters. Debt changes the outcome. Explore what creates the return, and what puts it at risk.
Illustrative acquisition€11.50mEntry EBITDA / 1 Jan 2026
100% acquisition · One equity class
100% acquisition · One equity class
Explore a case
€m
THE PRICE THAT FITS THE TARGET
03 / FOLLOW THE CAPITAL STRUCTURE
Follow the debt through the hold.
Annual closing debt by tranche, with EBITDA shown as a line. Interest accrues on opening debt.
04 / TEST THE ENTRY AND EXIT
What is the price of optimism?
Sponsor XIRR. Rows: entry multiple. Columns: exit multiple. Click a cell to apply it. Other current assumptions stay fixed.
Below targetAt / above targetUnfunded / invalid
05 / CHECK THE DEAL MECHANICS
From closing to exit
Behind the transaction Source assumptions & modelling conventions ＋
The source case
Entry EV / EBITDA 9.40x; exit 9.00x; five-year hold; €65m of closing debt. Management reinvests 5% of seller equity proceeds, which determines ownership from contributions. Sponsor and management participate pari passu.
Six debt instruments: RCF, senior A, senior B, retained target debt, mezzanine and PIK notes. Cash interest and PIK use opening balances. Fees apply to initial drawn debt. Cash sweep follows this prepayment order.
The source plan contains seven years of EBITDA, cash taxes, capex and working-capital balances. The EBITDA overlay scales standalone EBITDA by (1 + overlay)year. The incremental EBITDA change is taxed at the source marginal rate of 25%; revenue, capex, working capital and depreciation remain as supplied.
Return and funding conventions
XIRR uses actual dates and a 365-day year. MOIC includes dividends and all sponsor capital contributed. Minimum operating cash is €1.5m. RCF funding is capped by the facility; any remaining funding gap is disclosed and headline returns are withheld.
Debt maturing in the exit year is settled through exit proceeds after scheduled amortisation. PIK capitalisation is included in the net debt reduction contribution. Equity has limited liability; an exit shortfall remains visible.
The target entry price holds current debt and operating assumptions fixed and recalculates entry fees. A test bid rounds the entry multiple down to the next 0.05x. Fund management fees, carried interest, management incentive waterfalls and statutory tax calculations are excluded.
Illustrative transaction and figures · Scenarios remain in page memory · No installation or registration · No external data services