Private Equity Valuation Models
Does anyone have a good place to start on finding different Private Equity Valuation Models? Any help in finding set and accurate models would be great!!
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What?
What do you mean by Private Equity Valuation Models?
From the ghetto....
PE doesnt use models any different than IB in valuation. They use the same kind of lbo models that you would have in any ibank when working for sponsors.
I meant I-banking valuation models... if you know where I can find models which are comparative to the ones that the top I-banks use, that would be really helpful. thanks
Build your own.
It's not rocket science -- mainly multiplication, addition, and subtraction.
lbo models are just projection models. Assume revenue growth rates (and rates for all the costs). Pull net income into next year's equity account on the balance sheet. Then amortize the debt over the future years. Slap on an exit multiple assumption. Calculate your return.
Valuation models are comp models. Figure out Total Enterprise Value and divide that over EBITDA. Or figure out some prior transaction value and divide that over EBITDA. The multiple can serve as basis for your exit multiple assumption in your lbo model.
It doesn't take too much brains to build one of these things. And all important numbers are assumed. You can add all sorts of bells (mainly dividing one number by some other).
Just to answer the original question, we do have standard base models. These are fairly simple but include all the basic formulas and formatting so that creating a basic model takes you only 20min. The one we use is based off the Dealmaven basic lbo model and I have added a lot to our template in the past 2 years of working here. But without sharing the template (obviously cannot do that), our template has basically the following elements:
It's useful to have a template as it saves you lots of time...using previous deal models as a template for a new deal can be dangerous as you might have taken out elements or changed formulas in the previous deal that you now need in the current deal.
Anyway, once we sign a deal, it's very easy to build out these basic models with as much detail as you want (i.e. add per unit assumptions/add in multiple companies/segregate divisions/etc).
It's all pretty much the same. Except mine has depreciation schedules, tax issues, and some other whistles.
Can someone email me one of these? It would be highly appreciated.
Wow I don't think anyone would email them out, but just in case someone is willing to, could you also email one to me? I am working on getting a PE internship this summer and since I have no prior ibanking experience, this would be a GREAT help in helping me to be more comfortable with all the modelling. I am good on all the concepts and theory but an actual model would be great.
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