Purpose. How private equity actually prices companies: the valuation toolkit (trading comps, precedent transactions, DCF, LBO), the mechanics that turn a headline enterprise value into the cheque the seller receives, and the return math (IRR, MOIC, attribution) that investment committees argue about. Written for practitioners — deal teams, IC members, LPs underwriting GPs, and lenders reading sponsor models.
What the study covers
- 1The core idea: price is set by what the marginal buyer can pay
- 2The valuation toolkit
- 3The EV-to-equity bridge
- 4Building the LBO model
- 5Return metrics: IRR vs MOIC
- 6Returns attribution — what actually created the value
- 7Common pitfalls
- 8How an expert thinks about it
Technical exhibits
Worked examples, checklists and case studies included with this study.
Worked LBO Example
A fully tied, five-year LBO: sources & uses, debt schedule, projections, exit, MOIC/IRR, returns attribution
Sensitivity Tables
IRR and MOIC grids (exit multiple × growth, entry × exit), leverage/structure variants, how to read them
Paper LBO Mental Math
The 10-minute "paper LBO" and mental-math shortcuts used in interviews and first-pass screening
Purchase Price Mechanics
Cash-free/debt-free, debt-like items, NWC peg, locked box vs completion accounts, earn-outs