Buyer return calculator
This calculator models IRR and money multiple for an SME acquisition under different entry scenarios, consideration structure and exit.
Deal data
Enterprise Value: MX$16,000,000.00
Exit scenario
EBITDA at year 5: MX$5,877,312.31
Exit EV: MX$23,509,249.23
To see return in real terms (inflation-adjusted).
Results
| Concept | Value |
|---|---|
| Internal rate of return (nominal) | 6.9% |
| Real IRR (after 3% annual inflation)) | 3.8% |
| Money multiple (MoM) | 1.26× |
| Capital invested at close | MX$3,200,000.00 |
IRR: annualized return on invested capital. MoM: pesos recovered per peso invested. Capital at close: cash required at closing.
Compare IRR to your minimum hurdle (e.g. 20% for financial buyer) to validate whether the entry price makes sense.
Transaction summary
| Concept | Amount (MXN) |
|---|---|
| Enterprise Value (entry) | MX$16,000,000.00 |
| Cash at close | MX$3,200,000.00 |
| Seller note — principal | MX$7,200,000.00 |
| Seller note — total interest | MX$2,592,000.00 |
| Contingent tranche | MX$5,600,000.00 |
| Total consideration paid | MX$18,592,000.00 |
| Exit EV | MX$23,509,249.23 |
| Net gain | MX$4,917,249.23 |
Scenario comparison
| Scenario | Exit EV | TIR | MoM |
|---|---|---|---|
| Conservative | MX$17,033,140.63 | -2.5% | 0.92× |
| Base | MX$23,509,249.23 | 6.9% | 1.26× |
| Optimistic | MX$31,722,150.30 | 16.2% | 1.71× |
Reference return rates
| Buyer type | Minimum IRR |
|---|---|
| Financial buyer (PE/family office) | 20–25% |
| Strategic buyer (synergies) | 15–20% |
| Individual operator | 15–20% |
An IRR below your hurdle does not justify the entry price — regardless of the business EBITDA.
This tool does not incorporate systematic risk (cost of capital, beta, market risk premium). The IRR you get is the internal return of the deal flows; it does not adjust for market risk or your cost of capital. To incorporate risk explicitly, do so with an advisor or your valuation team.
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How to interpret the results?
IRR is the annualized return on invested capital; the money multiple (MoM) shows how many pesos you recover per peso invested at exit. You can enter an expected annual inflation rate to also see real IRR (inflation-adjusted), which is what matters for comparing to real rates or your cost of capital in real terms.
This calculator does not incorporate systematic risk (cost of capital, beta, market risk premium). The IRR you get is the internal return of the deal flows as you model them; it does not adjust for market risk or your cost of capital. Contrast the result with your minimum hurdle and, if you want to incorporate risk explicitly, do so with an advisor or your valuation team.
Compare the IRR you get with reference rates for your profile (financial buyer, strategic buyer or operator). An IRR below the hurdle you require does not justify the entry price, regardless of the business EBITDA.
What other tools and guides to check?
To model the consideration structure from the seller's perspective, use the consideration structure simulator. To understand typical multiples in the Mexican SME segment, see the guide on how to buy a company in Mexico.
Sources
Reference return rates (PE/family office, strategic buyer, operator) are based on market practice and sector reports: