Once you have a functioning lbo model, with the EBITDA multiple as an input and IRR as an output, whats the best way to turn it around to ask the question- if this is the required IRR, what is the multiple? I tried goal seek on the IRR using the purchase multiple as the input, but get ridiculous answers. Thanks
Trending Content - Private Equity Forum
| +45 | Consumer PE is dying/dead? | 10 | 14h |
| +44 | PE to PortCo Chief of Staff | 19 | 8h |
| +41 | Secondaries Career Outlook: Comp, Exits & Long-Term Upside? | 10 | 59m |
| +19 | Private Equity Office wear | 5 | 1h |
| +18 | Use Cases For Claude Cowork / Claude Code | 2 | 12h |
| +12 | Post-Banking Seats | 7 | 2d |
| +11 | Graduating Before Junior-Summer PE/Growth Internship — How Should I Approach the Firm? | 3 | 2d |
| +8 | How do I go from underpaid to overpaid | 2 | 4d |
| +7 | Oncycle rumors | 1 | 3h |
| +7 | JD, MBA related to PE and other Wall Street Jobs | 2 | 2d |
Career Resources
For a given level of debt, you don't need to include the purchase price in your calculation. Take the exit enterprise value and subtract ending debt to get the exit equity value. Assuming you're looking at 5 years and a 20% target IRR, the initial equity value=exit equity value/(1.2^5). Add the amount of initial debt you can get to get the implied purchase EV.
Thanks. That worked although I also had to also subtract the fees to get there
Explicabo cum eaque est porro molestiae. Sunt voluptatem et rem libero rerum. Qui adipisci eaque ut sed impedit illo. Consequatur et sint id maxime eaque sit sint. Molestias doloremque est culpa.
Eius amet adipisci sint iure rerum corrupti. Sunt quis vero voluptatem pariatur voluptas ex. Sequi ipsum et odio ut dolorem enim. Non assumenda fugiat nulla expedita maiores consequatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...