What should I look for in the data room?

Look at the forecast model and see how it is built up.  Do you have any breakout on a segment level?  Can revenue cleanly be broken down so that you can isolate price vs. quantity?  Look at the company's historical financials.  What is the top line growth profile?  How have margins trended?  How capital intensive is the business?  Are there any levers to trim down SG&A / corporate expenses?  What are the different buckets of expenses?  Will the company need to invest more in its facilities and equipment to sustain longer-term growth?  Is there any seasonality and/or cyclicality?  Look at the EBITDA addbacks.  Do they seem defensible?  You may need to look at the Quality of Earnings report separately.

Customer level databases can be immensely helpful.  Who are the top customers?  How concentrated is the company's revenue base if you were to look at the top customers, programs, products / SKUs, etc.?  Are top customers growing business with the company over time?  How long have they been customers?  Any key customers that stopped doing business with the company?  What do the contracts look like?  Are they diversified across different programs / products / SKUs?  To what extent is the business recurring in nature?  What sort of pricing power does the company have over its customers?  Are customers sole sourcing the company's products?  What sort of wallet share does the company have among its top customers?  Is there runway for increased penetration?  Pipeline / backlog detail can also be super helpful and can feed into the customer level data discussed above.  Can you quantify the go get needed to hit the projections?  How is the pipeline probability weighted?  Are there any key contracts that could make or break the forecast?  

Is the go get all organic or is there any M&A baked in (and are you pursuing a roll-up strategy)?  If M&A is a big part of the thesis, look at historical deals the company has done.  What multiples have they been able to acquire bolt ons at?  How have those multiples trended over time?  How have they funded the deals and how has the acquired business performed?  Do they have any deals under LOI?  Any in the near-term pipeline?  Deals under LOI sometimes feel like a land grab for extra purchase price (e.g., buy add on for 12x during process and then expect to sell platform for 18x, getting several turns of multiple arbitrage in the process).  If it's a very acquisitive business model, can you run some M&A cohort analyses by year acquired?  Is there a de novo model?  How long have de novos taken to become profitable?  Can you run a cohort analysis?  You can look at revenue growth, volume growth, margins, etc.

Technology, patents, licenses.  Anything noteworthy?  Do the IT systems need further investment?  Is any proprietary technology protected?  Talked about the customers above.  What about the suppliers?  Any dependence on key vendors?  How are contracts structured?  

Who are the key employees?  Are these salaried or hourly workers?  What does the compensation structure (i.e., base salary vs. bonus) look like at different levels?  Is it structured effectively to incentive employees appropriately?  Has the company experienced any labor / staffing challenges?  How have staffing ratios trended over time?  How have wages trended over time?  How has retention / turnover trended over time?  Why do employees leave the firm?  Are they quitting or are they getting fired?  

Does the company have any KPI dashboards?  How have KPIs trended over time?  Do they differ significantly across segments, geographies, facilities, etc.?  How do they compare to that of competitors?  Are there any quality / compliance metrics that get tracked?  Utilization rates, error rates, volumes, etc.

Any lawsuits to be aware of?  Does the company operate in an industry that is tightly regulated?  

Look at the cap table.  Is management going to get a big payout in the deal?  At various purchase prices, what kind of payout would you expect them to earn?  Will the team be incentivized to stay and/or perform?  Usually a good sign if they want to roll a significant chunk of equity into the new deal.  That is assuming there's a good team in place. Is there any key man (or woman) risk?  If a key management team member (or top performing sales rep) leaves, how likely are you to lose the client?  Are there multiple people assigned to cover each account or project (feeds into the customer piece above)?

I've found old board materials to be pretty helpful.  MD&A often makes it much easier to contextualize a bunch of numbers in a spreadsheet.  Market studies can also be super helpful in developing a better understanding for the space the company plays in and can (hopefully) lend some degree of support to various modeling assumptions.

This was a longer response than you (or I) probably bargained for but hopefully has some value. 

Made a few minor changes since I didn't re-read this before posting.  As Associate 2 in PE - Other and OverlyAdjustedEBITDA have pointed out, this would be a) a more detailed review (and not just an initial pass) and b) more suited for someone on the equity side.  I have seen some lenders really dive deep in diligence but for the most part, they won't get nearly as caught up in the weeds as those on the equity side.  Definitely didn't hit on every single detail but think this should give you a pretty holistic sense of what to look for.