Private Equity case studies, worked step by step

Cases
100
Traced to a firm
59
Topics
12
Hard
30
Topic
All topicsGrowth equity and software8Returns attribution and value creation8LBO modelling tests9Screening and ranking businesses9Distressed and special situations7Private credit and direct lending9Paper LBOs10Real estate and infrastructure8Portfolio operations and exits6Deal structuring and pricing9Fund, LP and portfolio analytics7Commercial and market cases10
Level
AnyWarm upCoreHard
Source
AnyReported at a firmStandard
Showing 31–40 of 100
  1. 031You have read the CIM and databook for a stable, capex-light engineering services business with Rs 75 crore of EBITDA. The sponsor wants Rs 300 crore of debt. What leverage, pricing and covenants do you propose, and how do you handle the two biggest risks?Private credit and direct lendingCoreGolub CapitalChicago · 2015
  2. 032Paper LBO on an oilfield services company whose EBITDA swings 30% either way with oil prices. Buy at 6x with 3.5x debt, exit at 6x in year 4. Work the return at trough, mid-cycle and peak, and say how much leverage a cyclical business can bear.Paper LBOsHardWarburg PincusNew York · 2017
  3. 033A laundry chain wants to enter a new city with three stores at Rs 1.2 crore of fit-out each. Each store handles 150 orders a day at Rs 250 with a 40% contribution margin and Rs 35 lakh a year of fixed cost. Is the entry worth it, and when does it pay back?Commercial and market casesWarm upAdvent InternationalBoston · 2021
  4. 034A tower company owns 10,000 towers at a tenancy of 1.6. Each tenant pays Rs 40,000 a month and each tower costs Rs 2.5 lakh a year to run. What is EBITDA at 1.6 and at 2.0 tenancy, and why do tower buyers pay for tenancy growth?Real estate and infrastructureCoreInfrastructure fund
  5. 035LBO test on a capex-heavy business: EBITDA Rs 90 crore, capex half of EBITDA every year. How much debt can it carry at 2.0x cover of EBITDA less capex over interest at 10%, and what IRR does a sponsor earn at 8x in and out with 8% EBITDA growth?LBO modelling testsCoreWarburg PincusNew York · 2017
  6. 036An airport services business at a regional airport handles 1.2 crore passengers a year: aero revenue is regulated at Rs 400 a passenger, non-aero revenue is Rs 180 a passenger and growing 10%, and traffic grows 7%. Value the business and say where the upside and the regulatory risk sit.Commercial and market casesCoreBain CapitalBoston · 2023
  7. 037A growth fund buys a minority stake in a fintech at 10x revenue and expects to exit at 5x revenue in five years. What revenue growth does it need for a 25% IRR, and is that believable?Growth equity and softwareHardGrowth equitySoftware buyout
  8. 038A portfolio company's EBITDA has fallen from Rs 100 crore to Rs 70 crore against Rs 480 crore of debt and a 5.5x leverage covenant. How large an equity cure is needed, and should the sponsor put the money in given a plan to recover to Rs 90 crore?Portfolio operations and exitsHardPortfolio operations teamPrivate credit
  9. 039Two funds of the same vintage: Mandala Fund III shows TVPI 1.9x, DPI 0.6x and a 21% IRR; Kshitij Fund II shows TVPI 1.7x, DPI 1.4x and a 17% IRR. Add a public market comparison and say which performance you trust more.Fund, LP and portfolio analyticsCoreNeuberger BermanLondon · 2022
  10. 040A sponsor asks for 6x adjusted EBITDA. Reported EBITDA is Rs 80 crore and the adjusted figure of Rs 100 crore includes Rs 20 crore of add-backs. What leverage is that on reported EBITDA, and which add-backs would you accept?Private credit and direct lendingCorePrivate credit

Company names and figures are illustrative.