Management Buyout Financing Structure Modeler

A management team rarely has private equity money. Senior debt and a vendor take-back note from the departing owner usually do most of the heavy lifting instead.

Reading This Tool

How To Use This Calculator

Enter the purchase price and how it's split between senior debt, seller financing, and management's own cash.

The smaller management's own cheque is relative to the deal, the higher the return on that cheque specifically, provided the business actually performs. This models all three tranches paying down at their own pace and what's left for management once both lenders are repaid.

Your Inputs

Total Purchase Price $5,000,000

Senior Debt Portion 50%

Vendor Take-Back Note Portion 35%

EBITDA At Entry $800,000

Annual EBITDA Growth 7.0%

Exit Multiple (EV/EBITDA) 6.5x

Years To Exit Or Refinance 5 yrs

Assumes senior debt amortizes 15% of original principal per year and the vendor note 20% per year, both straight-line, a simplification of whatever schedule is actually negotiated.

Return To Management's Equity

Management Equity IRR

0.0%

Management's Cash Investment

Multiple On Management's Cash

0.00x

Exit Equity Value To Management

Capital Structure: Entry vs. Exit

Senior Debt Vendor Note Management Equity

Ignores personal guarantees senior lenders typically require from management, which put personal assets at risk beyond the equity cheque itself. Also ignores any earn-out or performance-based vendor note adjustments common in real MBO structures.

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