Type of capex in cash flow
For capex it's nice to separate into maintenance vs. growth. Maintenance is similar to upkeep and should be around D&A while growth represents new (re-)investment into the business operations.
For a good LBO candidate we would obviously want predictable high cash flow. So we'd want low capex. But does that mean we would like to have low maintenance or growth capex? If you had 2 businesses where one had higher % of capex as growth vs maintenance which would you rather buy, all else equal?
When calculating levered FCF for a LBO which capex figure do we use?
LFCF = Net income + d&a - capex - change in NWC
What about unlevered FCF in a DCF?