How to Complete LBO for Private Company, No Cash Flow Statement?

Hi!

I am in no way a pro at this so please correct me if wrong. I would generally approach it something like this, assuming you have an on-site test with no access to comps.

As others have mentioned, you don’t need a historical CFS/BS.

1. Is historical capex / NWC available? If yes, then project these based on historical avg in % to revenue. If no, then try to think if this Company is asset heavy or if the business model would imply a large NWC, and base forecast of this. Use historical D&A as a guideline for Capex perhaps? If these assumptions feel like you are shooting from the hip, construct a sensitivity table with these parameters at the and.

2. In terms of Entry/Exit multiple, I would use a random entry multiple (e.g. 10x EBITDA) just for the purpose of setting up the model (incl. S&U, debt and return analysis). Assume Exit = Entry, and when the model mechanics is done, backsolve the multiple so you get a reasonable exit IRR.

3. If no details is given on debt, assume a generic bullet loan with the optionality to cash sweep + RCF. You can gauge the quantum by looking at what levels your FCFs turns negative, but generally around 3-6x. Assume a margin of, let’s say, 500 BPS