PE Interview Deal Confidentiality
During PE interviews, how would you go about deals (mostly MM private company M&A in this case) on your resume that are publicly announced with a valuation, but have non-public/disclosed metrics (revenue, EBITDA, multiples etc.) since it's a private company?
Are those metrics technically confidential and I shouldn't mention them in my interviews? Wouldn't that largely limit the scope of the deal discussion? That is, you won't be able to comment on the company's valuation multiples, growth rates, margins, etc.
Most interview guides and deal discussion templates seem to presume that all of the company's financial metrics (EBITDA, FCF, ARR, customer concentration, etc.) are non-confidential, but I feel like that might not be the case in the MM when you're dealing with non-public companies. Would appreciate any thoughts on this from experienced PE professionals as well as what counts as confidential information in these ambiguous cases.
When I used to interview I would keep it vague but give some type of indication of the range of the numbers.
For instance, if they ask about the leverage and pricing I would for instance say "the pricing was around mid-single digit and leverage around the same figure" or if talking about EBITDA would say it was in the mid-twenties and EV/EBITDA was in the low-teens.
Usually, if it is a publically announced company, even if the valuation is non-public, it's not hard to estimate a range.
I would use numbers in a generalized sense. Give them an order of magnitude but not the exact number.
For example, I worked on Spirit AeroSystem’s $865m acquisition of Bombardier’s aerostructures business. This was between two public companies so everything is public and you can fact check these numbers but it is a good example. Spirit bought this business because (1) it had $1b in Airbus revenue and at the time over 50% of the revenue came from the Boeing 737, (2) it had $100m in defense revenue including on multiple defense projects that Spirit determined were key platforms, and (3) it had an mro facility in Dallas which allows Spirit to have proper mro facilities in-house which is important since the aftermarket is effectively the only subscription-like revenue in the industry and Dallas was identified by Spirit’s aftermarket team as being one of the three key locations that we need to be in.
Every one of those numbers is not the exact amount. Those all are providing order of magnitude. They give the person you are talking about context into the numbers without providing the exact ones. I hope this helps
Saepe libero ea qui tempora impedit tempore ad facilis. Neque et quis et aut qui. Sequi consectetur magnam quia rerum quia quibusdam. Sit voluptas velit fugit sit ab ut dolorum est.
Labore vitae dolore tenetur quaerat quia ipsa et deleniti. Ab aspernatur dolorem commodi tempore. Saepe quisquam perferendis incidunt fuga aut molestiae. Et quae inventore nisi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...