Why do PE firms use an LBO model instead of a DCF model?

PE firms need to forecast their cash flows available for financing, which shows how much debt they need to borrow or repay. This way, they can build a debt schedule and figure out how much debt they can pay back, which allows them to find their ending equity after selling their company. By comparing their ending equity and initial equity invested, the PE firm can calculate their return measured by IRR and multiple of capital.

Using an LBO model, a PE firm can also arrive at an implied valuation at a given IRR and exit multiple.

Only an LBO has the functionality to calculate IRR or an implied valuation at a given IRR. A DCF will not have a debt schedule, will not include the impact of debt, and only gives you the intrinsic value of the company (eg for valuing stocks) but not the value in a leveraged buyout.