Private Equity interview preparation

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September 2026

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1. 011Give me a purchase price for this company, given that the acquisition will generate an extra million of EBITDA.ValuationHardtechnicalAudax GroupPrivate Equity · Boston · 2021

   Say this

   Price the standalone business on its own multiple, then decide how much of the synergy you are willing to hand to the seller. In a buy-and-build you want to pay for the asset as it is and keep the synergy for yourself.

   Then walk it

   1. Start with standalone value: the target's own EBITDA at a multiple appropriate to its size and quality. Small bolt-ons trade well below platform multiples, often six to eight times against twelve for the platform.
   2. Then the synergy. That extra million of EBITDA, capitalised at your platform's exit multiple, is worth ten or twelve million of enterprise value to you.
   3. The negotiation is about how much of that you concede. A disciplined buyer pays little or nothing for synergies it creates; a competitive auction forces you to share some of it.
   4. So I would express it as a range: I would open at the standalone multiple, and my walk-away is the price at which the deal stops clearing my return hurdle after synergies.
   5. Then check the maths on the multiple arbitrage: buying at seven times and having it valued at twelve inside the platform creates value immediately, and that arbitrage is the core of any buy-and-build.
   6. And I would probability-weight the synergy. Cost synergies in a bolt-on are largely deliverable; revenue synergies rarely are, so I would underwrite only the former.

   Where candidates lose it

   Adding the synergy to the target's EBITDA and paying a full multiple on the combined figure. That hands the entire value creation to the seller before you have done any work, and it is the error the question is designed to find.

   Expect next

   • How much of the synergy would you pay away in a competitive auction?
   • What is multiple arbitrage?
   • How do you underwrite synergies in diligence?

   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.