Module IV· Sources & UsesBasic
Question
What does the Sources & Uses table show in an LBO?
Answer
What
A table that lays out the financing structure of an LBO. Both sides must be identical — Sponsor Equity is the plug.
| Uses (what for) | Sources (where from) |
|---|---|
| Equity purchase price | Cash on target balance sheet |
| Refi existing debt | Senior Debt (TLA, TLB, RCF) |
| Transaction costs | Mezzanine / Junior Debt |
| Financing fees (OID) | Sponsor Equity (plug) |
| Minimum cash | Rollover Equity (management) |
Pitch tip
Senior checks: (1) both sides sum to the same total, (2) Debt/EBITDA within market range, (3) equity 30–50% — mentioning these proactively signals model hygiene.