I have an interview coming up this week and they said there will be a technical portion with a pen and paper. Any insight as to what sort of questions may be asked (outside of the typical paper LBO)?
Trending Content - Private Equity Forum
Career Resources
Probably some more complex sources & uses / cap structure stuff (e.g. purchase price is X, mgmt wants to roll 10%, and has 10% options, whats the sponsors PF ownership at exit).
Also maybe some exit math stuff (e.g. You bought company at x EBITDA, y multiple, z multiple of debt and exit at b EBITDA and c multiple, what's your MOIC? How much $ gain was driven by multiple arb vs. growth, what happens if you change x assumption, etc.)
There's probably more as well, but those are common.
Would exercise of management options dilute the original management rollover stake?
For the top question about mgt options - is the below correct?
Assume purchase price is $100. Sponsor equity is 50% and there's a 10% mgt rollover. Therefore entry sponsor equity is 50 and mgt roll is 10. And there is the 10% option pool. Assuming exit equity value is 500.
Sponsor ownership pre-option pool = 500 * 50% = 250
Management roll/ownership = 500 * 10% = 50
Management options = 500 (closing equity value) - 50 (initial sponsor equity investment) * 10% = 45
Sponsor equity at close = 250 - 41 = 209
Is this correct?
Where did you get the 41 from?
Sorry. 45
Pariatur nulla eos ut dolorem nisi. Laudantium sint ducimus quis omnis voluptatem molestias.
Nostrum incidunt voluptatem nisi. Nobis dolorem delectus odit sapiente iusto voluptas id. Suscipit pariatur officia omnis ipsam ut quam. Eligendi exercitationem excepturi nobis autem molestiae assumenda aliquid.
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...