Private Equity interview preparation

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September 2026

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1. 087How would you model a bolt-on acquisition inside an existing platform?LBO mechanicsHardtechnicalAudax GroupPrivate Equity · Boston · 2021

   Say this

   Add the target's EBITDA and synergies to the platform, fund it with incremental debt and any equity top-up, then check the pro forma leverage against the credit agreement and the effect on the sponsor's equity return.

   Then walk it

   1. Start with sources and uses for the bolt-on: purchase price at the target's multiple, fees, funded by incremental term loan, revolver drawing, or a sponsor equity contribution.
   2. Add the target's EBITDA plus realisable cost synergies to the platform's consolidated EBITDA. Be conservative on synergies and phase them over 12 to 24 months rather than assuming day-one delivery.
   3. Check pro forma leverage immediately. The credit agreement will have a permitted acquisitions basket and an incurrence test, usually requiring leverage to be no worse than before or below a defined level. If the deal breaches it you need lender consent.
   4. The accretion test: because you buy at six times and the platform is valued at twelve, the deal is immediately value-accretive on a multiple basis. Show that arbitrage explicitly, since it is the core of the strategy.
   5. Then the return effect: model the exit with the enlarged EBITDA at the platform multiple and compare the sponsor IRR with and without the bolt-on. If the sponsor has to fund equity, the timing of that cheque matters for IRR.
   6. And model the integration cost as real cash, because it always is, and it is the line most often omitted.

   Where candidates lose it

   Assuming synergies arrive immediately and forgetting integration costs. Also ignoring the credit agreement: many bolt-ons are constrained not by economics but by what the existing documentation permits.

   Expect next

   • What is a permitted acquisitions basket?
   • How do you phase the synergies?
   • What if it breaches the leverage test?

   Reported by candidates at Audax Group (Private Equity, Boston, 2021). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.