This case study test evaluates a candidate's understanding of an intermediate-level Private Equity transaction, walking through a case study of investing in a new business.
The case study covers technical analysis, transaction structuring, calculating returns, due diligence and legal workstreams.
Designed to access
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Understanding of a Private Equity deal
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Deal structuring
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Valuation methodology
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Legal and Due Diligence workstreams
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Returns
Use this test to hire for
- Private Equity Associates
- Private Equity Investment Managers
- Corporate Finance Managers
- Investment Banking Associates
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Duration 10 minutes
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Languages English
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Level Intermediate / Level 2
Question
You are part of the investment team on a new deal. The target business is a wealth management business making £50m Revenue, £35m Gross Profit and £10m EBITDA. The business is forecast to grow top line 20% next year and hold the same EBITDA margin as the current year.
You plan to bid 10x for the business – what is the Enterprise Value?
Select ONE answer
Question
You are asked to increase your final bid and you decide to offer £150m Enterprise Value for the business, representing 15x £10m EBITDA. The business has £10m cash, £20m debt and management are rolling £10m into the deal. What is the required total cheque size to finance your bid?
Select ONE answer
Question
The total requirement for the deal is £130m and you decide to use leverage to reduce the equity cheque size. Based on the business making £10m of EBITDA, what would your equity cheque size be if you decide to use 3.0x leverage?
Select ONE answer
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Scales to accommodate your hiring needs, from small teams to large-scale recruitment drives