Leveraged buyout analysis from the target's own numbers
Decide how much debt the business can carry from the cash flow it actually reported, with every input traced to its page.
SpreadSpace™ spreads the target's financial statements, tax returns and bank statements from the data room and reads the leverage and coverage measures a buyout turns on off that spread. Each figure keeps a link to the page it came from, so the sponsor, the lender and the committee read the same evidence.
Build adjusted EBITDA with the add-backs shown, lay the proposed debt service beside the latest year's cash flow and develop the sources and uses, the returns case and the exit assumptions in the spreadsheet. Work in SpreadSpace or embed the workspace in your deal platform.
Start from the cash flow the target reported
Upload the audited and reviewed statements, the business tax returns, the bank statements and the debt schedules from the data room. SpreadSpace reads them into one spread with each company, period and unit identifiable, and the reported lines stay behind every mapped figure.
Bank statements show the cash that actually moved. Read deposits, withdrawals and financing activity beside the statements before relying on an earnings figure.
Build adjusted EBITDA with the add-backs shown
The analyst chooses every add-back, and the spread shows each one beside the reported line it adjusts, with the period and the supporting document attached. Management's adjustments and the sponsor's sit in separate columns in the spreadsheet, so the committee sees whose number is whose.
A write-in adjustment can be a formula over the printed figures, such as the average of three years of repairs, and the spread says where the number came from.
Read leverage and coverage off the spread
Debt to EBITDA, net debt to EBITDA, debt to equity, interest coverage and the implied cost of debt read off the spread, each one opening into the rows that produce it. Free cash flow conversion and capital expenditure against depreciation and amortization show how much of the earnings turns into cash the debt can be paid from.
Every ratio is derived from the reported lines, so a reviewer can open the figure and see the exact rows, periods and pages behind it.
Lay the proposed debt beside the latest year
A pro forma coverage view takes the latest year the target reported and the proposed debt service, interest and principal, and shows whether that year's cash flow carries it. The historical years stand on their own, with no proposed debt on them.
Change the debt quantum, the rate or the amortization and the pro forma view follows. The historical basis does not move.
Build the sources and uses and the returns case
Continue in the spreadsheet with formulas that cite the spread. Lay out the sources and uses, the projected periods and the exit case, and read the returns with IRR and XIRR, with the historical inputs still linked to their pages.
Set up the scenarios the committee wants to compare and keep the assumptions labeled apart from the reported figures. The team chooses the leverage, the pricing and the exit. SpreadSpace keeps the evidence under every case.
Write the committee memo and the financing memorandum in your template
Upload the memo your committee reads, or the financing memorandum your lenders receive, as a PDF or a Word document, and SpreadSpace reproduces its structure as a reusable template.
Bring the spread, the adjusted EBITDA schedule, the leverage analysis and the returns case into it as exhibits. Reviewers open a figure in the exhibit and land on its source, and finalizing records the version the committee saw.
Bring the analysis into your deal platform
Use the native workspace or embed the review in the deal management system your firm already runs. An integration can retrieve finalized spreads and memo renders through the API.
Keep exploring
Work together
Review loans
Private equity
M&A advisory
- M&A advisoryWork the sell side and the buy side from the same spread.
- Sell-side advisorySpread the company's numbers before a buyer does.
- Buy-side advisoryTest the seller's adjustments against the data room.
- 10-K and 10-Q extractionBring reported financials into your analysis.
- Business valuation memosWrite valuation memos in your firm's format.
Test a recent buyout on its own documents
Bring the data room from a recent deal and the leverage the committee approved. Read the coverage off the spread, lay the debt beside the latest year and see whether the case holds on the reported numbers.