I am in the middle of a deal, and have identify the following ones (deal is TMT): 1. CAGR Revenue 2. EBITDA Margin 3. Capex 4. Exit Multiple
Are those correct ? Which other ones you normally test? Would those differ for sectors?
Trending Content - Private Equity Forum
| +89 | Nothing to do at work & bored to hell | 9 | 1d |
| +67 | Do people over-index on 'moats' | 22 | 1d |
| +53 | Predicted Net Worth in Trodden Finance Path by 60? | 20 | 1d |
| +44 | Biggest (avoidable) failures in PE Investments? | 25 | 1d |
| +38 | Why is ROIC never really a topic when looking at companies IRL | 11 | 4d |
| +24 | What do you think of PE Value Creation Careers in 2026? | 7 | 10h |
| +15 | Honest opinions needed about lateraling | 5 | 8h |
| +12 | NY LMM PE Recruiting | 3 | 2d |
| +12 | How to approach Buyside Recruiting | 3 | 5d |
| +10 | Is the lifestyle really better? | 6 | 2h |
Career Resources
Off the top of my head, you could also sensitize interest rate (or if this is an LBO, how much leverage is available in the first place) or changes in working capital.
Thanks for the answer - it makes sense. More generally, what approach do you use to identify which metrics to use? Not only for TMT, but also for other sectors.
You can sensitize literally any input of your model. Depending on what kind of TMT company it is, you can sensitize payback months (telecom), payback months improvement, churn, churn improvement, growth rates required to hit certain MOICs, growth in different divisions of the company relative to one another, entry price or multiple, % stake acquired, preferred equity coupon, leverage, carry given to mgmt., etc. etc. - the last couple aren't common, but just to give you an idea of the art of the possible.
That's pretty good, appreciated it. Since I will need to do the same with other sectors (Renewables, Utilities, Consumer Staples, Transport) what approach you use to identify the key metrics?
Quia doloremque nobis in cum non voluptates eveniet. Similique eveniet hic animi hic dicta reprehenderit qui quidem. Beatae aut id nesciunt. Repudiandae quidem magnam ad temporibus labore. Totam esse sint harum et labore.
Et vero nihil similique quos necessitatibus. Voluptas ut ut consequatur ut maiores eos nihil. Libero sit temporibus maxime qui.
Quos tempora debitis qui quaerat vel voluptates modi. Voluptates et non blanditiis. Aut praesentium est vel iure et iste.
Minus quasi aut quo id rem voluptatem. Earum autem velit accusamus reprehenderit incidunt animi. Quos dolores velit voluptatem asperiores dolores molestias non quis. Aspernatur optio ducimus accusantium eaque reiciendis harum veniam. Minus consectetur tenetur aspernatur aut. Eos qui consectetur suscipit fugiat occaecati.
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...