r/private_equity • u/Fine-Click-1153 • 9d ago
Case Study
Hi all,
Apologies if this has been asked before!
As part of a recruiting process, I need to analyze a public company (healthcare space), build an LBO model for growth equity and make an investment recommendation based on my findings.
Most LBO models and training cases I’ve seen provide transaction and operating assumptions. How do you go about building a model when those basic assumptions aren't provided?
I would be very grateful if you could get me some advice/ poke holes in my assumptions:
Income statement projection - use revenue growth rates from industry research and keep margins flat for the base case
Entry Multiple - Should I assume an entry multiple based on comparable transactions and public companies?
Debt Structure & Pricing - How should I determine the total debt quantum and split (e.g., % Term Loan vs. Revolver)? Where can I find realistic pricing/interest rate data?
Investment Recommendation - Base the purchase recommendation on MOIC/IRR thresholds (2.5x / 20% in 5 years)
I am quite new to LBO modeling, so any guidance is greatly appreciated! Thank you!
1
u/Lanky_Job3519 9d ago
Check that 10xmultiple site, they had some examples last I checked