Peak Frameworks - PE Recruiting Guide

Question 1

What are the 3 key LBO levers (ways it makes money)?

Answer 1

1. EBITDA Growth
2. Raising Debt and Paydown
3. Multiple Expansion

Question 2

What are the three key drivers of EBITDA growth?

Answer 2

1. Top line growth (revenue growth)
2. Cost cutting
3. Making accretive acquisitions

Question 3

What are the two main drivers of ensuring value creation debt paydown?

Answer 3

1. Ensuring consistency of cash flow
2. Reducing CapEx

Question 4

What are the two main drivers of multiple expansion?

Answer 4

1. Building a high quality business
2. Investing in markets that will improve

Question 5

What is debt tenor?

Answer 5

The length of time until a loan is due

Question 6

Describe the
- interest rates
- types
- rate type (fixed or floating)
- tenor
of Bank Debt

Answer 6

Low
Revolver, Term Loan A, Term Loan B
Floating (moves with LIBOR)
5-7 years

Question 7

Describe the
- interest rates
- types
- rate type (fixed or floating)
- tenor
of Notes

Answer 7

Higher
Senior, Subordinated
Fixed
7-10 years

Question 8

Is the prepayment on bank debt?

Answer 8

Yes

Question 9

Is there prepayment on bonds?

Answer 9

No

Question 10

Is there prepayment on notes?

Answer 10

No