Struggling with Asset Purchasing LBO
I’m currently interning at a lower middle market PE firm and was asked to build an asset purchase LBO for a heavy equipment dealer.
I had a couple of questions:
The CIM provides a 3-year segment breakdown (new equipment, used equipment, parts & services, F&I), but limited detail on volumes or unit economics. Given how cyclical this business is, how do people typically build a defensible forecast for segment-level revenue growth? My initial approach was to anchor on historical trends and adjust for macro, but I’m struggling to justify forward assumptions given volatility.
- More broadly, how would you structure an asset purchase LBO differently from a standard equity purchase model (particularly around balance sheet setup and sources/uses)?
Any advice or frameworks would be greatly appreciated. template? My firm didn't provide a lot of guidance on how to structure it honestly.
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