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About this interview
A technical interview on IB Core Technicals, pitched at the medium level. A voice AI interviewer leads the conversation, adapts its questions to your answers, keeps you on topic, and afterward gives you honest, specific feedback on where you were strong and where to improve. Expect roughly 30 minutes.
What you'll be assessed on
Build a sources-and-uses table and compute a leverage multiple (Debt/EBITDA) for an LBO entry
Explain the cash flow sweep / mandatory debt paydown mechanic and compute a single year's sweep
Compute MOIC and IRR for a full LBO hold period, and show how a change in the exit multiple assumption changes both
Decompose total equity value creation into its three drivers — EBITDA growth, multiple expansion/contraction, and debt paydown — with an exact numeric bridge
Identify the operating and financial characteristics that make a company an attractive (or poor) LBO candidate, and explain management rollover, dividend recaps, and leverage covenants
Topics covered
LBO Core ConceptSources & UsesDebt Tranches & Leverage MultipleCash Flow Sweep / Debt PaydownExit Multiple Assumptions & SensitivityReturns Math: MOIC & IRRValue-Creation Levers BridgeManagement Rollover / Equity StructureLBO Candidate CharacteristicsDividend RecapsLeverage Covenants
A few sample questions
Just examples to set expectations - the real interview has many more and adapts to your responses.
“In plain terms, what is a leveraged buyout?
“In year one, the company generates $100 million of EBITDA, spends $10 million on capex, pays $36 million of cash interest (using the blended rate from before), and pays $10 million of cash taxes. Assuming no change in working capital, how much debt gets swept that year, and what's the resulting year-end debt balance starting from $500 million?
“Now do the exact version: in the multiple-expansion scenario from before (exit at 9.0x, exit equity value of $1,150 million), decompose the full $830 million of value created (1,150 minus the $320 million initial equity) into its three exact drivers — EBITDA growth, multiple expansion, and debt paydown — and confirm they sum to the total.