4 hours
4-Hour Buyout Model and Memo
Build the operating cases, value an expansion project and recommend an entry price.
You send backExcel model, two-page memo
$69
See the testPractice Tests / 4-Hour LBO Model and Investment Slides
- 4 hours
- Excel model + slides
- Firm's workbook
- Private equity
4-Hour LBO Model and Investment Slides
Read a 64-page memorandum, build an LBO on a company that grows by acquisition and put your view on two or three slides.
You get the test, a worked answer key, the model and slides I sent and a two-page debrief.
Redwick Technical Services, a fictional company · Recreated from a test I took in June 2023
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What you are given
A 64-page memorandum and the firm's financial workbook.
This is a page from the test. Select it to read it at full size.
What the test asks
- Read a memorandum on a sponsor-owned technical building services company that grows by acquisition: HVAC and mechanical service, standby power and building controls.
- Build a summary three-statement LBO model with a recommended price, one unitranche loan at a recommended leverage multiple, revenue by service line, a cash flow statement, a balance sheet, returns and sensitivity tables for a management case and a base case.
- Send the model in Excel and as a PDF.
- Add two or three slides: historical and projected financials, returns, sensitivities, pros and cons.
- All of it in four hours.
What the answer looks like
The answer key is a complete model you can check yours against line by line, with a note wherever it differs from what I sent. This example is from the free test, so nothing here gives this case away.
The note on the Taxes row
<- Got this wrong on the day: in the 60-minute file (row 27) this was EBT x (1 - tax rate), which is after-tax income, and cash taxes read it. Tax is EBT x the tax rate.
Take the free 60-minute test to see a full answer key and debrief
What you get
Start here.pdf1 page
1 - The test
1 - The assignment.pdf1 page
2 - Confidential information memorandum.pdf64 pages
3 - Financial support.xlsx
2 - My answer
1 - Answer key (corrected model).xlsxcheck yours against this
2 - The model I sent.xlsx
3 - The model I sent.pdf3 pages
4 - The slides I sent.pdf4 pages
3 - Debrief
Debrief.pdf2 pages
Who it is for
- Anyone facing a timed LBO case in a private equity associate process.
- Bankers who have built an LBO from a template and not from a 64-page memorandum with the clock running.
- Anyone who wants practice on a platform that buys other companies, where the question is how the acquisitions are paid for.
- Four hours for the attempt and about one more to compare and read the debrief.
The story
In May 2023 a recruiter reached out about a private equity firm that was hiring its first class of associates.
After two interviews with the firm in June, the recruiter emailed me its case study on a Sunday afternoon: a financial workbook and a 64-page memorandum on a company for sale. I had four hours from the email to build an LBO model, send it in Excel and as a PDF, and add two or three slides with my view for the investment committee.
The three files went back at the end of the four hours. The firm then set a one-hour video call to go through the case.
Before you start
Is this the real test?
It is recreated from the test I took. The format, the task and the time limit are the same. The company is fictional and its figures are changed.
Why two models?
One is the file I sent. The other is the same file corrected, with a grey note on every row that changed. Check your numbers against the corrected one.
Did the corrections matter?
Yes. My model added acquired EBITDA every year and never paid for it. Paying the 6.0x the memorandum gives takes the three-year return from 30.5% to 22.9% on its own, and the corrected model returns 23.1%. The debrief lists each fix with its rows and what it was worth.
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38 pages, a blank workbook and two pages to make the call.
You send backExcel model, two-page write-up
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