LBO deals: where the return actually comes from
Blackstone's Hilton and the Dell go-private, read for the lesson that matters: EBITDA growth and deleveraging, not multiple expansion.
Blackstone and Hilton
2007 take-private, ~$26B
~78% debt and ~22% equity at entry; IPO in 2013 and staged sell-downs through 2018 produced more than $14B in profit, often cited as one of private equity's most profitable hospitality LBOs. Lesson: high leverage, an operational playbook and cycle timing.
Michael Dell, Silver Lake and Dell
2013, $24.9B go-private
Financed with sponsor and founder equity, a $2B Microsoft loan, and ~$11–12B in bank debt; returned to public markets in 2018 via the VMware tracking-stock transaction. Lesson: a complex capital structure can enable multi-step value creation.
Most of the return comes from EBITDA growth and steady deleveraging. Focus on resilient cash flow and operations, not on hoping for multiple expansion.
Informational content only. Not investment advice.