LBO Returns Calculator - Stefano Campita

How LBO returns work An LBO return depends on the entry equity check, operating growth, debt paydown, and exit valuation. The sponsor wins when exit equity value grows faster than the initial equity invested.

See the formula

MoIC = Exit Equity Value / Initial Sponsor Equity

IRR is the annualized return that links the initial equity investment to the exit equity proceeds over the holding period.

Inputs

Entry Assumptions

Entry EBITDA $M

Entry Multiple x

Debt Multiple x EBITDA

Cash to Balance Sheet $M

Transaction Fees % of purchase EV

Operating Assumptions

EBITDA Growth % / year

Cash Conversion % of EBITDA

Interest Rate %

Holding Period years

Exit Assumptions

Exit Multiple x EBITDA

Value Creation Bridge

Debt Paydown Schedule

Entry / Exit Multiple Sensitivity

Model Assumptions

This tool is for educational and illustrative purposes only. LBO outputs are simplified and assumption-sensitive. This is not financial advice.

How to Use This Calculator

1. Set Entry Value

Start with EBITDA and an entry multiple to estimate purchase enterprise value.

2. Size the Debt

Use a debt multiple and cash conversion assumptions to model deleveraging during the hold.

3. Check Exit Returns

Compare MoIC and IRR across multiple scenarios to see what drives the sponsor return.