How to model LBO with no CFS or BS?
Hello,
How would I short form LBO model a company with only the last three years of income statements by month?
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It's possible with just the income statement - do they give you other assumptions about the transaction? If no, you'll need to make educated guesses about the company's existing net debt (might be possible to derive from interest expense), sources and uses, NewCo. debt, and KPIs like rev growth, COGS and OPEX growth, D&A, etc. (I always like that part because it's an opportunity to get creative within the context of the company and the industry).
From there, project out the next 5 years of the income statement and model the full debt situation based on your assumptions, and then assume an appropriate EBITDA multiple to get to EV and get to equity value from there.
If there is cash sweep or dividends, model those as well, and then you throw a quick XIRR on there, a MOIC calculation, and a sensitivity analysis of revenue growth and IRR and you're good to go.
Anybody have other stuff to add or change?
thanks so much
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