Is there normally a paper LBO at a PE superday?
I have a superday next Friday at a UMM firm. Should I prep for doing a paper LBO?
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Every firm is different and every interviewer is different. A paper LBO is definitely a reasonable potential screener, so no reason not to be prepared.
You may get one, may not. If you don't, it's still a concept you'll need to understand for the real job, so it's worth learning.
I agree with this response. That being said, I wouldn't go overboard with the prep. There's a lot online, but I have yet to see a paper LBO more complex than something like... revenue 100M growing 25M a year, 30% EBITDA margins, 10% D&A, 10% interest, 10% capex. Purchase entry and exit 10x LTM EBITDA, 5x leverage. No pre-payment of debt. Usually. So just calculated cumulative cash flow.
It's also just a screener... if it takes you slightly longer to do the mental math, it's not a big deal.
That's been my experience, on both sides of things. Feel free to correct me, if your firm does differently.
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