LBO Structuring

Build the sponsor base case: sources and uses that tie, leverage in turns, an annual cash sweep, a flat-multiple exit, and IRR and MOIC with a bridge.

⚠️ **Finance warning / Avertissement finance** : informational only, not investment advice. A structure that clears a hurdle on paper can still lose money in reality: leverage magnifies losses as readily as gains, there is a real risk of loss, and no IRR or MOIC here is a promise of return. Curated by Skill Harbor: the LBO structuring skill of the private equity pack in andreworia/claude-finance-skills. Use it when the entry price is live and you need to know what the structure returns, not what the seller says the business is worth; it fixes one base case, one entry multiple, one capital structure, one exit, for sensitivity work to flex against, and it belongs before an indicative bid, not after. The method fixes the entry as the entry multiple times quality of earnings adjusted EBITDA, never management-adjusted, and ties sources to uses to the dollar: uses are purchase price, refinanced debt, fees and closing adjustments, sources are debt stated in turns of that same EBITDA, rollover, and sponsor equity as the plug, with fees counted as real equity that sits in uses and never appears at exit. Cash available is built honestly (EBITDA less capex, less the movement in net working capital, less cash taxes, less cash interest), cash taxes are modelled as rising while the interest shield shrinks rather than as a flat line, the sweep follows the step-downs the credit agreement actually contains (typically 75 percent below 4.0x and 50 percent below 3.0x) instead of a full sweep for five years, and the interest circularity is resolved with iteration or a circuit breaker. The exit is at a flat multiple in the base case; assuming expansion is treated as aggressive and must be named, caused and quantified separately so the committee can strip it out and still see a deal. Returns are reported as both MOIC and IRR, because a strong MOIC on a seven-year hold can miss the hurdle while a fast flip can clear IRR on an immaterial gain, and the equity gain is bridged into EBITDA growth at the constant entry multiple, multiple change on exit-year EBITDA, debt paydown equal to the cumulative sweep, and the fee drag at entry. The worked base case in the file, Meridian Flow Controls, is fictional and illustrative. From the andreworia/claude-finance-skills repository (MIT). Honest caveats: the skill produces the structure and figures in prose, not a spreadsheet, and the adjusted EBITDA, debt terms, five-year plan and fee estimate are yours to supply and to verify; small changes in any of them move the returns materially. Skill Harbor never reviews the code, review it yourself before use.

At a glance

What: Build the sponsor base case: sources and uses that tie, leverage in turns, an annual cash sweep, a flat-multiple exit, and IRR and MOIC with a bridge.
Cost: Free
Needs: Use "LBO Structuring" with your Muse.
Install: Copy the installer prompt below into your Muse — your agent does the rest.

⚠️ **Finance warning / Avertissement finance** : informational only, not investment advice. A structure that clears a hurdle on paper can still lose money in reality: leverage magnifies losses as readily as gains, there is a real risk of loss, and no IRR or MOIC here is a promise of return. Curated by Skill Harbor: the LBO structuring skill of the private equity pack in andreworia/claude-finance-skills. Use it when the entry price is live and you need to know what the structure returns, not what the seller says the business is worth; it fixes one base case, one entry multiple, one capital structure, one exit, for sensitivity work to flex against, and it belongs before an indicative bid, not after. The method fixes the entry as the entry multiple times quality of earnings adjusted EBITDA, never management-adjusted, and ties sources to uses to the dollar: uses are purchase price, refinanced debt, fees and closing adjustments, sources are debt stated in turns of that same EBITDA, rollover, and sponsor equity as the plug, with fees counted as real equity that sits in uses and never appears at exit. Cash available is built honestly (EBITDA less capex, less the movement in net working capital, less cash taxes, less cash interest), cash taxes are modelled as rising while the interest shield shrinks rather than as a flat line, the sweep follows the step-downs the credit agreement actually contains (typically 75 percent below 4.0x and 50 percent below 3.0x) instead of a full sweep for five years, and the interest circularity is resolved with iteration or a circuit breaker. The exit is at a flat multiple in the base case; assuming expansion is treated as aggressive and must be named, caused and quantified separately so the committee can strip it out and still see a deal. Returns are reported as both MOIC and IRR, because a strong MOIC on a seven-year hold can miss the hurdle while a fast flip can clear IRR on an immaterial gain, and the equity gain is bridged into EBITDA growth at the constant entry multiple, multiple change on exit-year EBITDA, debt paydown equal to the cumulative sweep, and the fee drag at entry. The worked base case in the file, Meridian Flow Controls, is fictional and illustrative. From the andreworia/claude-finance-skills repository (MIT). Honest caveats: the skill produces the structure and figures in prose, not a spreadsheet, and the adjusted EBITDA, debt terms, five-year plan and fee estimate are yours to supply and to verify; small changes in any of them move the returns materially. Skill Harbor never reviews the code, review it yourself before use.

Version:

a

Created by: andreworia

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Install — Free · open source (MIT) View source code

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Install

Copy the install package below, then paste it into Muse

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Use "LBO Structuring" with your Muse. Prerequisites: quality of earnings adjusted LTM EBITDA and the entry multiple range from the process terms, the capital structure (tranches, quantum, rates, amortisation), a five-year plan with capex, working capital and cash taxes, a fee estimate, any management rollover, and your fund hurdle and hold period. A spreadsheet tool helps you keep the model afterwards: this skill produces the structure and figures in prose, and every assumption in it is yours to verify. Informational only, not investment advice. 1. Open the skill: https://github.com/andreworia/claude-finance-skills/blob/main/packs/private-equity/skills/lbo-structuring/SKILL.md and copy the full SKILL.md text. 2. Paste it into a chat with Muse and add: "Build the sponsor base case: tie sources to uses to the dollar with the equity plug shown, state leverage in turns and equity as a percent of EV, build the cash sweep year by year with the credit agreement step-downs, exit at a flat multiple, and report MOIC and IRR with the value-creation bridge split into EBITDA growth, multiple change, debt paydown and fees." 3. Re-add the numbers yourself before relying on them, and ask what an exit one turn higher would add, stated separately, so the comfort it supplies is visible. Tip: insist on the adjusted EBITDA, never the management figure; the haircut is the argument, and structuring on the seller number builds it into every return. Safety: a skill is plain-text instructions; it runs nothing by itself. Modeling and documents only, no orders and no account access. Informational only, not investment advice.

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Questions

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Every product page includes a copy-paste install prompt. Paste it into your Muse and it sets the build up for you — no manual configuration.

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