What You'll Learn
- Model EBITDA multiples and deconstruct Transaction Comps.
- Apply back-of-the-envelope Discounted Cash Flow (DCF) models.
- Calculate Enterprise Value and assess acquisition debt leveraging.
Lesson Overview
Valuation is the core anchor of any corporate transaction. Master EBITDA multiples, Discounted Cash Flow (DCF) dynamics, Net Present Value, and strategic buyout metrics used by Private Equity sponsors.
Your interviewer says: "A private equity sponsor is evaluating the acquisition of a regional SaaS company with $20M in recurring revenue and an 80% Gross Margin. Competitor SaaS firms typically trade at a 10x EBITDA multiple. The client has an EBITDA margin of 25%. What is the estimated Enterprise Value of this company?"
Why This Matters for Consulting Interviews
MBB firms with heavy private equity practices (especially Bain and EY-Parthenon) test your comfort with basic balance-sheet arithmetic.
Prerequisites
- M&A Transactions
- Synergies Modeling
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