Exit Multiple

The EV/EBITDA (or similar) multiple assumed or achieved when a PE-owned company is sold or taken public. Sponsors often assume exit at or below entry multiple to avoid relying on multiple expansion for returns.

Practise it

A fresh deal every time. Solve MOIC and IRR in your head, check the worked math, and see a returns waterfall break it down.

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Where Exit Multiple comes up

How to Build a DCF Model: Build Order, Terminal Value and the Sanity ChecksA DCF is 70% terminal value and 100% assumptions. Build it so both can be defended.Read the guide — 12 min How to Build an LBO Model: The Build Order That Survives a Modelling TestUnder a 90-minute clock, the build order is the difference between a returns number and a half-finished model.Read the guide — 13 min DCF Interview Questions: The Ones That Actually Come UpFrom "walk me through a DCF" to the follow-ups that catch people who only memorised the steps.Read the guide — 8 min

Keep reading

Private Equity interview prep

Related Private Equity terms

Entry Multiple Leverage Ratio (Debt/EBITDA)LBO (Leveraged Buyout)Sponsor Dry Powder Add-On Acquisition

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