Is it true that Apollo PE does not look at EBITDA?
Instead they focus all analysis solely on unlevered FCF? This makes perfect sense and I'm surprised more sponsors do not do this. Can anyone verify?
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I mean don't all funds inherently do this? This is how an LBO cash waterfall works.
Sure for the creation multiple / set-up multiple many will look at a EBITDA multiple as a shorthand. For capital intensive industries use an EBIT multiple which is more or less FCF.
The funds that look at a capital intensive auto-manufacturing business and state something along the lines of "Look it's so cheap - it's only 5x of EBITDA!!!" should not be ones that you join.
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