Simplified Valuation Model

Abstract

Based on the previously illustrated Equity Cash Flow method with a target IRR as a discount rate, we will develop a standardized approach for a preliminary LBO attractiveness evaluation in the following. The result should be a spreadsheet valuation model that can be applied to almost any company and - within the assumptions made - will provide workable indications of the return achievable in a leveraged buyout transaction. Once the model has been established in a general way, we will discuss possible adjustments for technology buyouts and finally employ the model upon publicly available data from European technology markets.