Sample LBO Analysis

Written Analysis

A sponsor LBO model for Nvidia with entry valuation, financing assumptions, debt schedule, exit waterfall, and return sensitivities.

1. 1

   Modeled the acquisition and capital structure.

   The LBO uses a 130x entry multiple, producing a $925.7B enterprise value and a $366.74 offer price per share, which is a 24.4% discount to the modeled current share price. The financing stack includes about $53.4B of total debt at close.

2. 2

   Tested deleveraging capacity.

   The debt schedule shows total debt/EBITDA falling from 7.25x to 1.20x by 2027 as EBITDA expands and cash flow is used for paydown. Free cash flow available for optional debt paydown increases materially over the hold period.

3. 3

   Proved the return depends on an aggressive exit.

   The model produces a 29.8% IRR and 3.68x MoM, but that result assumes the exit multiple remains at the same 130x level as entry. The analysis is useful because it shows how difficult a mega-cap Nvidia take-private would be unless growth and exit valuation both remain extremely strong.