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Case study

How we supported an acquisition with an integrated LBO model, from operating projections and financing to debt repayment and investor returns.

Industry
Data centers and digital infrastructure
Service
M&A financial modelling · LBO analysis
Engagement
Acquisition support
Delivered in
6–10 business days
Client
Confidential
Executive summary

The transaction subsequently closed.

An acquisition-focused client was evaluating a data center investment and needed a comprehensive leveraged buyout (LBO) model to support the decision.

We brought operating projections, acquisition valuation, financing assumptions, debt schedules, cash flow analysis and investor returns together in one integrated model, delivered within 6–10 business days. It gave the client a structured basis for judging the acquisition economics, the financing implications and the potential returns.

The challenge

What the client needed

Data center acquisitions turn on operating performance, capital expenditure, financing structure and long-term returns, and these have to be assessed together. The client needed a full LBO model that could answer a set of connected questions:

Questions the model had to answer

  1. 01How do the acquisition assumptions translate into an integrated transaction model?
  2. 02How does the proposed financing structure affect debt obligations and cash flow requirements?
  3. 03Will projected operating cash flows support the modelled debt repayment schedule?
  4. 04What equity returns could the entry and exit assumptions generate?
  5. 05How sensitive are returns to operating performance, financing, valuation and exit scenarios?

The objective was to consolidate all of this into one structured model suitable for transaction evaluation.

Our approach

One integrated model, six linked workstreams

We built an integrated LBO model that connects the acquisition assumptions to projected performance, financing requirements and equity returns, in six linked workstreams.

Inputs
Transaction and acquisition assumptions
Operating drivers for the data center
Debt and financing assumptions
Integrated LBO model
  1. Operating projections
  2. Cash flow
  3. Debt schedule and repayment
  4. Valuation and equity returns
What the client could assess
Entry valuation and transaction economics
Leverage and debt repayment profile
Returns across scenarios and sensitivities
  1. Workstream 01

    Acquisition and transaction modelling

    Structured the transaction assumptions and acquisition inputs, giving the model a consistent starting point for analysing the deal structure.

  2. Workstream 02

    Operating financial projections

    Built forward-looking projections from the operating assumptions and data center business drivers, and linked them to financing and returns.

  3. Workstream 03

    Acquisition financing and debt schedule

    Integrated the debt and financing assumptions, connecting the capital structure with financing costs, obligations and repayment.

  4. Workstream 04

    Cash flow and debt repayment

    Linked projected operating performance to cash generation and debt service, showing how the operating case supports repayment over the hold period.

  5. Workstream 05

    Valuation and investor returns

    Connected entry valuation, financing and exit scenarios to projected equity returns, including the effect of debt reduction and exit value.

  6. Workstream 06

    Scenario and sensitivity analysis

    Tested how changes in key operating, financing, valuation and exit assumptions move returns, so the client could compare alternative cases.

Key deliverables

What we delivered

DeliverablePurpose
Acquisition and transaction assumptionsEstablish the transaction framework
Operating financial projectionsEvaluate projected business performance
Acquisition valuation analysisAssess entry valuation and transaction economics
Financing assumptions and debt scheduleModel leverage, financing costs and debt repayment
Cash flow analysisConnect operating performance with debt servicing
Exit valuation frameworkAssess potential exit scenarios
Equity returns analysisEvaluate potential investor returns
Scenario and sensitivity analysisTest the impact of changes in key assumptions
Integrated LBO modelConsolidate inputs, projections, financing and returns
Outcome and client impact

The transaction closed

Our model supported the acquisition evaluation by bringing the key financial components of the deal into a single, integrated framework.

More structured investment evaluation

One consistent framework for reviewing acquisition assumptions, operating performance, financing requirements and potential returns.

Clear view of financing and debt repayment

Integrated financing and cash flow schedules made leverage, debt obligations and cash generation visible in the same model.

Insight into potential returns

The LBO framework linked entry assumptions and capital structure to exit outcomes and the investment’s financial profile.

Alternative scenarios on demand

Scenario and sensitivity analysis showed how changes in key assumptions could move returns and transaction economics.

Delivered within a defined timeline

The complete model was delivered within 6–10 business days, ahead of the transaction’s eventual close.

Evaluating an acquisition? We build LBO models, acquisition analysis and valuations around your deal.

Discuss your transaction

The model was an analytical input to the transaction process. No claim is made that the modelling work alone caused the transaction to close, or that any specific investment return was achieved.

Why it matters

Why this engagement matters

Data center acquisitions involve interconnected operating, financing, valuation and investment questions. A comprehensive LBO model brings these variables together for a more structured assessment of the deal.

This engagement shows our ability to deliver end-to-end transaction modelling within a defined timeline, combining operating projections, acquisition financing, debt schedules, valuation, scenario analysis and investor returns, built around what acquisition teams and investment professionals actually need.

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Evaluating an acquisition? We build LBO models, acquisition analysis and valuations around your deal.

Discuss your transaction

Or email harsh.jindal@valcoreanalytics.com