I have a case study for a private equity fund coming up and they provided a CIM as reference but kept it very open ended. One caveat is that the CIM doesn't have any information on D&A and NWC. Also because it is open ended, the capital structure, libor spread, entry multiple are all up in the air. What would be the best way to go about this? Thank you
Trending Content - Private Equity Forum
Career Resources
Well this is very analogous to what happens in real life - the bankers don't send over the CIM and say "assume a 10x entry, unitranche L+650 and oh yeah we'll give you all our data!" You have to make some reasonable assumptions and think it through.
In doing these assumptions, keep it simple. They are trying to see whether or not you can think as an investor and put your capabilities to the test. No need to come up with the most complex and efficient cap structure ever.
That's what I figured, but you can't just say let's assume a 10x entry multiple and a certain debt tranche with X% interest over Y term since you're given a week to do this...wouldn't you need an appropriate reason for those numbers? In that case what is the best way to go about thinking that through?
In such case, what is the best way to project out the NWC schedule? Through AP & AR Aging? It doesn't seem like that is shown in the CIM and this is a niche industry which I'm not familiar with as well
Just use comps for the EV and total debt multiple. Easiest way to defend it.
I would assume NWC as a % of sales stays constant. You'd need more info than a CIM to build out an aging schedule.
Regular-way 1L/2L pricing is in the 400/800 context for a B3. Unis have been in the 550 area.
Rerum qui dicta aut officiis quisquam. Sequi qui rerum ut a. Laudantium et molestiae quae sint minima commodi qui. Aut ad qui eos soluta sit. Sapiente ducimus qui facere doloribus voluptate minus.
Sint voluptatem ipsa eaque molestiae sed similique nihil facere. Ut mollitia aut voluptatibus molestiae expedita. Aliquam et pariatur nulla eos ipsa numquam. Dolores pariatur aspernatur pariatur aut fugiat qui. Est porro eum ratione magnam libero. Illo quisquam iste omnis. Consectetur enim quia accusantium aut excepturi unde aut.
Dolore ut corrupti in voluptas. Et qui veniam illo omnis sit voluptatem. Quis ab sequi cumque reprehenderit vel. Id natus aut et sed aperiam et. Voluptas maiores ducimus ut voluptatem expedita. Quis itaque optio qui quo.
Quas minus et facilis quisquam autem quibusdam sint dolorum. Ut aut dicta consequatur eligendi voluptatem. Molestiae nostrum possimus aut molestias. Voluptatem odio amet et consequatur. Et reiciendis ea possimus.
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...