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skills/excel-lbo-modeler/SKILL.md

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+---
+name: excel-lbo-modeler
+description: |
+  Create leveraged buyout (LBO) models in Excel with sources & uses, debt schedules, cash flow waterfalls, and IRR calculations for private equity analysis Activates when you request "excel lbo modeler" functionality.
+allowed-tools: Read, Write, Edit, Grep, Glob, Bash
+version: 1.0.0
+---
+
+# Excel LBO Modeler
+
+Builds comprehensive LBO models for private equity transactions following industry-standard practices.
+
+## When to Invoke This Skill
+
+Automatically load this Skill when the user asks to:
+- "Create an LBO model"
+- "Build a leveraged buyout model"
+- "Private equity analysis for [company]"
+- "Calculate IRR for acquisition"
+- "LBO for [company]"
+- "Buyout model"
+- "What returns can we get on this deal?"
+
+## Model Structure
+
+This Skill creates a complete 6-sheet Excel LBO model:
+
+### Sheet 1: Transaction Summary
+- **Deal Terms**: Purchase price, entry multiple, equity check
+- **Sources & Uses**: How the deal is financed
+- **Returns Summary**: IRR, MoM, hold period
+
+### Sheet 2: Sources & Uses
+
+**Uses of Funds:**
+```
+Purchase Equity Value
++ Estimated Net Debt
+= Enterprise Value
++ Transaction Fees (2-3%)
++ Financing Fees (2-3%)
+= Total Uses
+```
+
+**Sources of Funds:**
+```
+Revolver (typically 0% at close)
++ Term Loan A (2-3x EBITDA)
++ Term Loan B (2-3x EBITDA)
++ Subordinated Debt (1-2x EBITDA)
++ Preferred Equity (optional)
++ Sponsor Equity (remainder)
+= Total Sources
+```
+
+### Sheet 3: Operating Model (5 Years)
+```
+Revenue
+  × Revenue Growth %
+  × EBITDA Margin %
+= EBITDA
+  - CapEx
+  - Change in NWC
+  - Cash Taxes
+= Cash Flow Available for Debt Service
+```
+
+### Sheet 4: Debt Schedule
+
+**For Each Debt Tranche:**
+```
+Beginning Balance
++ Draws (if revolver)
+- Mandatory Amortization
+- Excess Cash Flow Sweep
+- Optional Prepayment
+= Ending Balance
+
+Interest Expense = Avg Balance × Interest Rate
+```
+
+**Debt Paydown Waterfall:**
+1. Revolver paydown
+2. Term Loan A amortization
+3. Term Loan B amortization
+4. Excess cash → Revolver
+5. Remaining excess → Optional prepayments
+
+### Sheet 5: Returns Analysis
+
+**Exit Valuation:**
+```
+Exit Year EBITDA
+  × Exit Multiple
+= Exit Enterprise Value
+  - Net Debt at Exit
+= Exit Equity Value
+```
+
+**Returns Calculation:**
+```
+Exit Equity Value
+  ÷ Initial Equity Investment
+= Money-on-Money Multiple (MoM)
+
+IRR = ((Exit Value / Entry Value)^(1/Years)) - 1
+```
+
+**Sensitivity Tables:**
+- Exit Multiple vs Hold Period → IRR
+- Exit Multiple vs Entry Multiple → IRR
+- EBITDA Growth vs Exit Multiple → MoM
+
+### Sheet 6: Debt Covenants
+
+**Leverage Covenants:**
+```
+Total Debt / EBITDA (typically ≤ 6.0x at entry, step down over time)
+Senior Debt / EBITDA (typically ≤ 4.0x)
+```
+
+**Coverage Covenants:**
+```
+EBITDA / Interest Expense (typically ≥ 2.0x)
+(EBITDA - CapEx) / Debt Service (typically ≥ 1.2x)
+```
+
+## Step-by-Step Workflow
+
+### 1. Gather Transaction Inputs
+
+**Required Inputs:**
+- Target company name
+- Current year EBITDA (or trailing twelve months)
+- Entry valuation multiple (EV/EBITDA, typically 8-12x)
+- Expected revenue growth (Years 1-5)
+- Expected EBITDA margin expansion (if any)
+- Exit multiple assumption (typically = entry multiple or slight premium)
+- Hold period (typically 5 years)
+
+**Optional Inputs (use defaults):**
+- CapEx as % of revenue (default: 3%)
+- NWC as % of revenue (default: 10%)
+- Tax rate (default: 25%)
+- Transaction fees (default: 2.5%)
+
+### 2. Structure Financing
+
+**Typical LBO Debt Structure:**
+- **Revolver**: 1-2x EBITDA, undrawn at close (cash buffer)
+- **Term Loan A**: 2-2.5x EBITDA, 5-7 year amortization
+- **Term Loan B**: 2-3x EBITDA, minimal amortization
+- **Subordinated/Mezzanine**: 1-2x EBITDA (if needed)
+- **Total Debt**: 5-6x EBITDA
+- **Equity**: Remainder (typically 30-40% of purchase price)
+
+**Interest Rates (as of 2025):**
+- Revolver: SOFR + 3.00% (default: 8.0%)
+- Term Loan A: SOFR + 3.50% (default: 8.5%)
+- Term Loan B: SOFR + 4.50% (default: 9.5%)
+- Subordinated: 12-14% (default: 13.0%)
+
+### 3. Build Operating Projections
+
+Project 5 years of operations:
+```
+Year 0 Revenue
+  × (1 + Growth Rate) for each year
+= Projected Revenue
+
+Projected Revenue
+  × EBITDA Margin
+= Projected EBITDA
+
+EBITDA
+  - CapEx (Revenue × CapEx %)
+  - Δ NWC (Change in Revenue × NWC %)
+  - Cash Taxes (assume % of EBITDA)
+= Cash Flow to Equity (before debt service)
+```
+
+### 4. Calculate Debt Paydown
+
+For each year:
+1. Calculate cash available after operations
+2. Pay mandatory debt amortization
+3. Pay interest on all tranches
+4. Use excess cash to pay down revolver first
+5. Then pay down term loans (highest rate first)
+6. Track ending debt balances
+
+### 5. Calculate Returns
+
+At exit (typically Year 5):
+```
+Exit EBITDA
+  × Exit Multiple
+= Exit Enterprise Value
+  - Remaining Net Debt
+  + Excess Cash
+= Exit Equity Value
+
+Money-on-Money = Exit Equity Value / Initial Equity
+IRR = (MoM)^(1/Years) - 1
+```
+
+### 6. Create Sensitivity Tables
+
+Build 3 sensitivity analyses:
+1. **IRR Sensitivity**: Exit Multiple (rows) vs Hold Period (columns)
+2. **MoM Sensitivity**: Exit Multiple (rows) vs Entry Multiple (columns)
+3. **Value Creation**: EBITDA Growth (rows) vs Margin Expansion (columns)
+
+## Example Formulas
+
+### Sources & Uses
+```excel
+// Enterprise Value
+=EBITDA * Entry_Multiple
+
+// Transaction Fees
+=Enterprise_Value * 2.5%
+
+// Term Loan A
+=EBITDA * 2.0  // 2.0x EBITDA
+
+// Sponsor Equity
+=Total_Uses - Total_Debt
+```
+
+### Debt Schedule
+```excel
+// Beginning Balance Year 1
+=Sources_and_Uses!Term_Loan_A
+
+// Interest Expense
+=AVERAGE(Beginning_Balance, Ending_Balance) * Interest_Rate
+
+// Mandatory Amortization
+=Original_Balance / Amortization_Period
+
+// Ending Balance
+=Beginning_Balance - Mandatory_Amortization - Excess_Paydown
+```
+
+### Returns
+```excel
+// Exit Enterprise Value
+=Exit_EBITDA * Exit_Multiple
+
+// Exit Equity Value
+=Exit_Enterprise_Value - Exit_Net_Debt
+
+// IRR
+=IRR(Initial_Equity (negative), Year1_CF, Year2_CF, ..., Final_CF_with_Exit)
+
+// Money-on-Money
+=Exit_Equity_Value / Initial_Equity_Investment
+```
+
+## Example Interaction
+
+**User:** "Build an LBO model for a $50M EBITDA software company"
+
+**Skill Response:**
+```
+I'll create an LBO model for a software company with $50M EBITDA.
+
+Let me gather a few inputs:
+
+What entry multiple should we assume (EV/EBITDA)?
+(Software companies typically trade at 10-15x EBITDA)
+
+User: 12x
+
+Great! What revenue growth should we assume for Years 1-5?
+(Software companies often grow 15-25% annually)
+
+User: 20%, 18%, 15%, 12%, 10%
+
+What EBITDA margin should we assume?
+(Current or target margin)
+
+User: Start at 25%, expand to 30% by Year 5
+
+Perfect! I'll use these assumptions:
+
+📊 Transaction:
+- Entry EBITDA: $50M
+- Entry Multiple: 12.0x EV/EBITDA
+- Enterprise Value: $600M
+- Equity Check: ~$240M (40%)
+
+💰 Financing Structure:
+- Revolver: $50M (undrawn)
+- Term Loan A: $100M @ 8.5%
+- Term Loan B: $150M @ 9.5%
+- Subordinated: $50M @ 13.0%
+- Total Debt: $350M (7.0x EBITDA)
+- Sponsor Equity: $265M
+
+📈 Operating Assumptions:
+- Revenue growth: 20% → 10% (tapering)
+- EBITDA margin: 25% → 30% (expansion)
+- CapEx: 3% of revenue
+- NWC: 15% of revenue (working capital heavy)
+
+Building LBO model...
+
+✅ LBO Model Complete!
+
+📊 Base Case Returns (5-year hold, 12x exit):
+- Exit EBITDA: $97.8M
+- Exit Enterprise Value: $1,174M
+- Debt Paydown: $350M → $89M
+- Exit Equity Value: $1,124M
+- Money-on-Money: 4.2x
+- IRR: 34.2%
+
+🎯 Key Insights:
+- Strong returns driven by EBITDA growth (95% increase)
+- Significant deleveraging (7.0x → 0.9x)
+- Margin expansion adds $24M in exit EBITDA
+- Multiple arbitrage: None (flat entry/exit multiple)
+
+📁 Model saved to: Software_LBO_Model.xlsx
+
+⚠️ Sensitivity Check:
+- At 10x exit: IRR = 26.8% (still attractive)
+- At 14x exit: IRR = 41.1% (exceptional)
+- Downside protected by strong cash generation
+
+Would you like me to adjust any assumptions or run additional scenarios?
+```
+
+## Common Variations
+
+### Request: "What returns do we need to hit our 25% IRR hurdle?"
+
+**Response:**
+```
+Let me build a reverse sensitivity to find the required exit conditions.
+
+With current assumptions (12x entry, 5-year hold):
+
+To achieve 25% IRR, you need:
+1. 10.5x exit multiple (13% discount to entry), OR
+2. 15% EBITDA CAGR (vs current 14%), OR
+3. 4.2 year hold period (vs 5 years)
+
+The deal has multiple paths to your hurdle rate.
+
+Would you like me to add a scenario analysis showing these paths?
+```
+
+### Request: "Model a dividend recap in Year 3"
+
+**Response:**
+```
+I'll add a dividend recapitalization to the model.
+
+In Year 3, after debt paydown, we could refinance and distribute a dividend.
+
+Assumptions:
+- Refi to 5.0x EBITDA (from current 3.8x)
+- Distribute ~$150M to equity sponsors
+- Reset debt maturity clocks
+
+This would:
+- Boost IRR by ~300bps (partial liquidity in Year 3)
+- Reduce final exit proceeds
+- De-risk investment with early cash return
+
+Should I add this to the model?
+```
+
+## Error Handling
+
+### Over-Leveraged Structure
+```
+⚠️ Warning: Total debt of 8.5x EBITDA exceeds typical LBO leverage (5-7x).
+
+This financing structure may:
+- Not be achievable in current market
+- Violate debt covenants
+- Leave insufficient cash flow for operations
+
+Recommended: Reduce debt to 6.0x EBITDA maximum.
+
+Would you like me to adjust the capital structure?
+```
+
+### Negative Cash Flow
+```
+⚠️ Issue: Model shows negative cash flow in Year 2.
+
+Causes:
+- Interest expense ($62M) + Debt amortization ($25M) > Cash Flow ($78M)
+- Insufficient EBITDA growth to service debt
+
+Solutions:
+1. Reduce entry leverage (currently 7.0x)
+2. Increase revenue growth assumptions
+3. Extend amortization schedule
+4. Add PIK interest option
+
+Would you like me to adjust the model?
+```
+
+## Best Practices Embedded
+
+This Skill follows PE industry standards:
+
+1. **Debt Structure**: Typical 5-7x EBITDA total leverage
+2. **Conservative Assumptions**: Exit multiple ≤ entry multiple
+3. **Covenant Headroom**: Maintain >15% cushion on covenants
+4. **Cash Flow Sweep**: Model 75-100% excess cash flow to debt paydown
+5. **Multiple Scenarios**: Always include sensitivity tables
+6. **Professional Formatting**: Clear sections, color-coding, audit trail
+7. **Reasonableness Checks**: Validate leverage, coverage, growth rates
+
+## Resources
+
+See the resources folder for:
+- `lbo-template.xlsx`: Pre-built LBO template
+- `REFERENCE.md`: Private equity modeling best practices
+- `debt-structures.txt`: Common debt structures by industry
+
+## Limitations
+
+This Skill creates a standard LBO model suitable for:
+- Initial investment committee presentations
+- First-round analysis
+- Learning/training purposes
+- Quick deal screening
+
+For detailed IC memos or final investment decisions, add:
+- Multiple scenarios (base, downside, upside)
+- Management option pool
+- Detailed working capital build
+- Quarterly debt schedules
+- Covenant compliance analysis throughout hold period
+- Transaction expense detail
+
+## Version History
+
+- v1.0.0 (2025-10-27): Initial release with core LBO functionality

skills/excel-lbo-modeler/assets/README.md

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+# Skill Assets
+
+This directory contains static assets used by this skill.
+
+## Purpose
+
+Assets can include:
+- Configuration files (JSON, YAML)
+- Data files
+- Templates
+- Schemas
+- Test fixtures
+
+## Guidelines
+
+- Keep assets small and focused
+- Document asset purpose and format
+- Use standard file formats
+- Include schema validation where applicable
+
+## Common Asset Types
+
+- **config.json** - Configuration templates
+- **schema.json** - JSON schemas
+- **template.yaml** - YAML templates
+- **test-data.json** - Test fixtures

skills/excel-lbo-modeler/references/README.md

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+# Skill References
+
+This directory contains reference materials that enhance this skill's capabilities.
+
+## Purpose
+
+References can include:
+- Code examples
+- Style guides
+- Best practices documentation
+- Template files
+- Configuration examples
+
+## Guidelines
+
+- Keep references concise and actionable
+- Use markdown for documentation
+- Include clear examples
+- Link to external resources when appropriate
+
+## Types of References
+
+- **examples.md** - Usage examples
+- **style-guide.md** - Coding standards
+- **templates/** - Reusable templates
+- **patterns.md** - Design patterns

skills/excel-lbo-modeler/scripts/README.md

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+# Skill Scripts
+
+This directory contains optional helper scripts that support this skill's functionality.
+
+## Purpose
+
+Scripts here can be:
+- Referenced by the skill for automation
+- Used as examples for users
+- Executed during skill activation
+
+## Guidelines
+
+- All scripts should be well-documented
+- Include usage examples in comments
+- Make scripts executable (`chmod +x`)
+- Use `#!/bin/bash` or `#!/usr/bin/env python3` shebangs
+
+## Adding Scripts
+
+1. Create script file (e.g., `analyze.sh`, `process.py`)
+2. Add documentation header
+3. Make executable: `chmod +x script-name.sh`
+4. Test thoroughly before committing