Private Equity - Key Criteria for an LBO

While every PE Firm has its own specific investment criteria, some of the common characteristics for a typical buy-out strategy consist of the following:

Financial Criteria:

• strong earnings history and strong margins
• positive and growing free cash flow to service debt
• leverage-able asset base

​Operational Criteria:

• strong management team with significant personal investment in company
• mature business with solid brand and market position
• differentiated products and services with intellectual property protection, high barriers to entry and products/services not subject to rapid technological obsolescence
• diversified customer base
• diversified supplier base
• diversified product line

Our Private Equity Suitability Questionnaire helps private business owners assess how a typical PE firm would view their business. 

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​Buy and Build Strategies

Overview on How the Private Equity Industry Works

• How the PE Companies Operate
• Types of Deals
• Financial engineering vs operational improvement
• Key criteria for an LBO
• Buy and build strategies
• What to look for in a PE firm
• PE business expertise
• Valuations and conclusions