excel-lbo-modeler

name	excel-lbo-modeler
description	Creates leveraged buyout (LBO) models in Excel with sources & uses, debt schedules, cash flow waterfalls, and IRR calculations. Targets private equity and investment banking workflows. Use when asked to create an LBO model, build a buyout model, calculate PE returns, or analyze a leveraged acquisition. Trigger with "create an LBO model", "build a buyout model", "PE returns analysis", or "leveraged acquisition model". Make sure to use whenever the user needs private equity deal modeling in Excel.
allowed-tools	Read,Write,Edit,Glob,Grep,Bash(npx:*),AskUserQuestion
model	inherit
version	2.0.0
author	Jeremy Longshore <[e-mail]>
license	Proprietary
compatible-with	claude-code
tags	["lbo","private-equity","financial-modeling","excel","investment-banking"]

Excel LBO Modeler

Table of Contents

• Overview — Prerequisites — Instructions — Output — Examples — Error Handling — Resources

Overview

Generates comprehensive 6-sheet LBO models for private equity transactions following industry-standard practices. Automates sources & uses, debt schedules, operating projections, returns analysis, and covenant tracking so PE associates can produce deal models from natural language inputs instead of building from scratch.

Prerequisites

• Node.js 18+
• @negokaz/excel-mcp-server MCP server configured
• Claude Code 1.0+

Instructions

Step 1: Gather Transaction Inputs

Use AskUserQuestion to collect:

Required:

• Target company name
• Current year EBITDA (or TTM)
• Entry valuation multiple (EV/EBITDA, typically 8-12x)
• Revenue growth rates for Years 1-5
• EBITDA margin (and any expected expansion)
• Exit multiple assumption
• Hold period (typically 5 years)

Optional (use defaults if not provided):

• CapEx as % of revenue (default: 3%)
• NWC as % of revenue (default: 10%)
• Tax rate (default: 25%)
• Transaction fees (default: 2.5%)
• Financing fees (default: 2.5%)

Step 2: Validate Inputs

Before building, verify:

• Entry multiple is 6-15x EBITDA
• Total leverage does not exceed 7x EBITDA
• Exit multiple is reasonable (typically <= entry multiple)
• Revenue growth rates are 0-30%
• EBITDA margin is positive and realistic for the sector

If validation fails, explain the issue and ask for corrected inputs.

Step 3: Structure Financing

Apply typical LBO debt structure:

• Revolver: 1-2x EBITDA, undrawn at close
• Term Loan A: 2-2.5x EBITDA, 5-7 year amortization, SOFR + 3.50% (default: 8.5%)
• Term Loan B: 2-3x EBITDA, minimal amortization, SOFR + 4.50% (default: 9.5%)
• Subordinated/Mezzanine: 1-2x EBITDA if needed (default: 13.0%)
• Sponsor Equity: Remainder (typically 30-40% of purchase price)

Step 4: Build 6-Sheet Model

Use the Excel MCP server to create:

Sheet 1 - Transaction Summary: Deal terms, sources & uses overview, returns summary (IRR, MoM, hold period).

Sheet 2 - Sources & Uses: Purchase equity value, net debt, enterprise value, transaction fees, financing fees. Sources: debt tranches + sponsor equity.

Sheet 3 - Operating Model (5 Years): Revenue projections, EBITDA, cash flow available for debt service.

Sheet 4 - Debt Schedule: For each tranche: beginning balance, mandatory amortization, excess cash flow sweep, interest expense, ending balance. Waterfall: Revolver first, then TLA, then TLB.

Sheet 5 - Returns Analysis: Exit EV, exit equity value, MoM, IRR. Sensitivity tables: Exit Multiple vs Hold Period, Exit vs Entry Multiple.

Sheet 6 - Debt Covenants: Total Debt/EBITDA (<=6.0x), Senior Debt/EBITDA (<=4.0x), EBITDA/Interest (>=2.0x), (EBITDA-CapEx)/Debt Service (>=1.2x).

All formulas link to Assumptions. No hard-coded values.

Step 5: Format Professionally

• Currency format for monetary values
• Percentage format for rates (1 decimal)
• Freeze top row and left column
• Bold headers, cell borders
• Color-code: blue for inputs, black for formulas
• Conditional formatting on sensitivity tables

Step 6: Return Results

Report exit equity value, MoM, IRR (base case), leverage at entry and exit, key sensitivity scenarios, covenant compliance summary. Flag if leverage >7x or negative cash flow in any year.

Output

• .xlsx file with 6 sheets: Transaction Summary, Sources & Uses, Operating Model, Debt Schedule, Returns Analysis, Debt Covenants
• Summary text with IRR, MoM, leverage metrics, and covenant status
• Warnings for aggressive assumptions (e.g., leverage >7x, exit > entry multiple)

Examples

Standard LBO Request

User: "Build an LBO model for a $50M EBITDA software company at 12x"

Results:
- Entry EV: $600M, Equity Check: ~$265M
- Exit Equity: $1,124M (5yr hold, 12x exit)
- MoM: 4.2x, IRR: 34.2%
- Deleveraging: 7.0x -> 0.9x

Saved to: Software_LBO_Model.xlsx

Minimal Inputs

User: "LBO model but I only know EBITDA is $30M"

Response: Uses PE industry defaults for sector.
All assumptions documented in Transaction Summary for easy adjustment.

Error Handling

Scenario	Response
Leverage >7x EBITDA	Warn structure may not be achievable, recommend reduction
Negative cash flow in any year	Flag concern, suggest reducing leverage or extending amortization
Exit multiple > entry multiple	Note assumption, flag as aggressive
IRR < 20%	Flag as below typical PE hurdle rate
Covenant breach in projections	Alert and suggest restructuring debt

Edge Cases

• If user provides no company name, use "Target Co" as placeholder
• If user wants dividend recap, add Year 3 refinancing scenario
• If user wants multiple scenarios, create Base/Bull/Bear columns

Resources

• ${CLAUDE_SKILL_DIR}/references/REFERENCE.md - LBO best practices, debt structures by industry