Private Equity Case Interview Example With Worked Answer

A private equity case interview example starts with a fund and a price, and asks whether the deal is worth doing. In this private equity case study example, Driftwood Partners weighs a $360M buyout of a 60-clinic vet chain: 2.57x MOIC and 20.8% IRR over five years against a 20% hurdle, but only if the exit multiple holds at 10x.

This guide covers the clarifying answers, three exhibits, the debt and return math, a sensitivity table and the spoken recommendation.

A consulting PE case does not need an Excel model: you test the market, the target's position and the price, then check one return number against the fund's hurdle, usually about 20% a year over five years. The full case below shows how.

At a glance: the worked case is a fictional buyout, with every number checked, so you can compare your own answer line by line. Practice it live: SurfacePro Materials PE Growth is a different client with its own data: a fund weighing a $400M bid, with 9 questions, 5 with math, and 5 exhibits, run in guided mode.

What does a private equity case interview ask you to decide?

It asks one decision: should the fund buy this company at this price? Everything else, the market, the competitors, the cost base, the debt, exists to answer that. If you want the wider picture, including the finance-recruiting formats, read the private equity case study guide. This page is the walkthrough.

The three are related. A consulting case borrows the logic of the paper LBO, so the LBO interview questions are worth knowing, but it spends most of its time on whether the revenue story is believable. The consulting version is what firms with a large private equity due diligence practice give candidates.

The case: Driftwood Partners and Hartley Veterinary Group

The prompt, as the interviewer reads it:

This is a made-up case with made-up numbers. It follows the pattern real firms use: market attractiveness, the target's position, value creation levers, entry and exit multiples, debt, and a return checked against a hurdle. For how that pattern maps to a repeatable structure, see the PE due diligence framework and the broader case interview frameworks guide.

Which clarifying questions should you ask, and what does the interviewer say?

Strong candidates spend the first minute on the objective, the constraint and the hold period before touching the market. Here is the exchange, condensed.

Two of these answers do real work. The hurdle gives you something to compare against, so the case has an answer. And "no new clinic acquisitions" stops you from inflating growth with a roll-up the fund has not asked about.

The price is 10 times $36M EBITDA, so $360M of enterprise value, which is 1.5 times revenue. With debt at 5 times EBITDA, that is $180M of debt and $180M of equity.

How should you structure a private equity case?

Say the structure out loud in about 30 seconds, and name each branch after the client's question rather than a generic bucket. A good version:

"I'd like to look at four things. First, how attractive the vet services market is in these five states. Second, where Hartley stands against its competitors and its own clinics. Third, what could grow its profit over five years, and what each lever is worth. Fourth, the price and the return: whether at $360M with this debt the fund reaches 20% a year, and what happens if the exit multiple is lower."

The four branches are a private equity version of a market attractiveness screen followed by a returns check. If you want a longer M&A checklist, the M&A case framework covers synergies and integration, which a pure financial buyer largely skips.

Is the market attractive? Exhibit 1

The interviewer hands you the first exhibit.

Exhibit 1: Five-state veterinary services market, last year

Check that the shares add to 100% (11 + 7 + 4 + 4 + 74) and that Hartley's 4% of $6.0B is $240M. Both hold. The interviewer adds that the market grows 6% a year.

What to say: the market is large, growing and fragmented. Three chains hold 22% between them, and independents hold 74%, so there is room to consolidate and no dominant competitor that sets prices. Hartley is not the leader, which is neutral: it can grow without a price war. At 6% a year, the market is worth about $8.0B in five years ($6.0B x 1.06^5). If Hartley grows 7% a year, it reaches $336.6M of revenue, about 4.2% share, a modest gain. That is a check on the growth assumption, not a reason to doubt it.

For sizing a market like this from scratch, the market sizing guide covers the method. For a healthcare-adjacent industry lens, see the healthcare case interview page.

Is Hartley's performance uniform? Exhibit 2

Exhibit 2: Hartley clinics by age, last year

The totals reconcile: 30 x $4.6M = $138M, 30 x $3.4M = $102M, $27.6M + $8.4M = $36.0M, and $36.0M / $240M = 15.0%.

This is the exhibit that finds the lever. The 30 newer clinics earn 8.2% against 20% for the mature ones, an 11.8 point gap. They are 42.5% of revenue ($102M / $240M). If better scheduling, purchasing and staffing close 40% of that gap, about 4.7 points, the group margin rises by 4.7 x 42.5%, which is 2.0 points: from 15% to 17%. That is where the plan's margin number comes from, and it is the point to make aloud: the margin gain is not a guess, it is a share of a gap the company already shows.

A candidate who stops at "margins could improve" has missed the sizing. A candidate who says "the newer clinics are the gap, and closing 40% of it is worth 2 points of margin" has found the lever and priced it.

What is Hartley worth in five years? The math, step by step

The interviewer now asks for a rough return. This is the part most candidates rush. Lay out the steps in order, and say each number as you go.

Step 1: Revenue. Assume 7% growth a year, built from about 4 points of price and mix and 3 points of extra visits (1.04 x 1.03 is about 1.07). Revenue in year 5 is $240M x 1.07^5, or $336.6M.

Step 2: EBITDA. At the 17% margin from Exhibit 2, year-5 EBITDA is $336.6M x 17%, which is $57.2M.

Step 3: Exit value. Assume the same 10x multiple on exit. Enterprise value is $57.2M x 10, or $572.2M.

Step 4: Debt at exit. The interviewer says the clinics generate about $14M a year of cash after interest, tax and capex, all used to repay debt. Over five years that is 5 x $14M, or $70M, so debt falls from $180M to $110M. That is 1.9 times year-5 EBITDA, a healthy exit leverage. Interest in year one is 8% x $180M, or $14.4M, which is covered 2.5 times by EBITDA ($36M / $14.4M), so the debt is serviceable.

Step 5: Equity at exit. $572.2M minus $110M of debt is $462.2M.

Step 6: Return. Equity went in at $180M, so MOIC is $462.2M / $180M, or 2.57x. IRR with one cash-in and one cash-out is MOIC to the power of one-fifth, minus one: 2.57^(1/5) - 1, or 20.8%. As a sanity check, 2.5x over five years is about 20% on the conversion table in the paper LBO section of the guide, and 2.57x sits just above it.

So the deal clears 20.8% against a 20% hurdle. It clears narrowly, which should make you suspicious of the result, not pleased with it.

Where does the return come from?

A strong candidate explains the return as a bridge, because it shows which lever matters.

The check: $462.2M of exit equity minus $180M of entry equity is $282.2M. Revenue growth is $(336.6 - 240) x 15% x 10 = $144.9M. The margin gain is $336.6M x 2% x 10 = $67.3M. The two sum to $212.2M, which equals the rise in EBITDA ($21.2M) times 10. Add $70M of debt paydown and it is $282.2M. Half the value is plain revenue growth, a quarter is margin, a quarter is debt repayment, and none is multiple expansion. That is the profile funds like: nothing in it depends on someone paying more for the business later.

What happens if the exit multiple is lower? The sensitivity table

Multiple expansion is zero in the base case, but multiple contraction is not impossible. A fund buys at 10x and a future buyer pays 9x. Test it.

At a 9x exit, enterprise value is $57.2M x 9, or $515.0M. Equity is $515.0M minus $110M, or $405.0M. MOIC is 2.25x and IRR is 17.6%. The deal now misses the hurdle by 2.4 points, because one turn of multiple costs $57.2M of exit value.

Exhibit 3: MOIC and IRR by revenue growth and exit multiple (entry $360M, debt paydown held at $70M in every cell, margin 17%)

Read the table the way an interviewer reads your answer. Four of nine cells clear 20%. The deal needs either 9% growth, or an exit multiple of 10x or better at 7%, or 11x at 5%. The base case sits on the edge, which means the price is doing too much of the work.

A related point on the debt: faster growth would also pay down debt faster, and this table ignores that to keep the comparison clean. State that simplification if the interviewer asks.

For readers who want the discounted version of an investment decision, the NPV case interview page explains how to compare cash flows over time.

What is the recommendation, and how does a strong answer sound?

The price question is the one that decides the case. Work backward: what is the highest price that still clears 20% if the exit multiple falls to 9x? Exit equity at 9x is $405.0M. To earn 1.2^5 = 2.488x on that, the fund can put in at most $405.0M / 2.488, or $162.7M of equity. Add the $180M of debt and the enterprise value is $342.7M, which is 9.5 times EBITDA.

Here is how that sounds as a spoken answer, in about 60 seconds:

"I recommend Driftwood bid, but below the ask. At $360M, 10 times EBITDA, the base case returns 2.57x and 20.8%, which clears the 20% hurdle by less than one point. Half the value comes from 7% revenue growth, a quarter from margin, a quarter from paying down debt, and none from the exit multiple. That is a good shape. But the result is fragile: if the exit multiple is 9x instead of 10x, the return falls to 17.6%. To protect 20% at a 9x exit, Driftwood can pay about $343M, around 9.5 times EBITDA. So I'd bid around $343M and treat $360M as the walk-away. The risks to check in diligence are whether the newer clinics can really close 40% of their margin gap, whether the 7% growth is mostly price and how much pushback from pet owners that price rise creates, and whether vets can be hired and kept at the cost the plan assumes. I'd start with the newer clinics, because they carry the margin lever."

How is a private equity case scored?

Road to Offer's debrief scores seven categories: structure at 25% of the score, quantitative analysis at 20%, business judgment at 15%, and problem understanding, exhibit reading, communication and synthesis at 10% each. This case leans on the first three. For the numbers behind a deal, the valuation interview questions page is a useful companion.

What mistakes do candidates make on private equity cases?

1. Praising the company and skipping the price. Hartley is a decent business. At 11x it would not be a decent deal. Always tie quality to price.
2. Assuming the hurdle. If the interviewer has not given the return target, ask. A number with nothing to compare it to is not an answer.
3. Quietly assuming the multiple expands. If your return needs the exit multiple above the entry multiple, say so and test it.
4. Treating revenue growth as the whole story. Revenue growth was half of the value here. The other half was margin and debt, and a candidate who ignored them would have been wrong by 11 points of IRR.
5. Sitting on the fence. "Attractive but risky" is not a call. Give a price, a condition or a pass.

Which other private equity and acquisition cases can you practice?

The case above is fictional. These are real cases in the library, each with its own client and data:

Case (style, industry)	Quant difficulty	Qualitative difficulty	The math you run	Median time
HarborHealth Acquisition of MedLink Virtual Care (BCG, digital health). 8 (2 with math), 4 exhibits.digital healthQuant difficulty mediumQualitative difficulty hard27 min· 28 voice runsTry free	medium	hard	EV/EBITDA multiple, maximum justified offer	27 min28 voice runs27 min, 28 voice runs	Try free
Craft Beverage Acquisition (Bain, consumer goods). 8 (4 with math), 3 exhibits.consumer goodsBainQuant difficulty mediumQualitative difficulty medium24 min· 14 voice runsTry free	medium	medium	Target profit, payback, synergy-adjusted payback	24 min14 voice runs24 min, 14 voice runs	Try free
Smart Radiators Acquisition (Bain, home heating). 7 (1 with math), 2 exhibits.home heatingBainQuant difficulty mediumQualitative difficulty mediumFewer than 10 runsTry free	medium	medium	Target EBITDA, multiple-based value	Fewer than 10 runsFewer than 10 runs	Try free
Car Wash Chain (Independent, automotive services). 8 (2 with math), 2 exhibits.automotive servicesQuant difficulty mediumQualitative difficulty mediumFewer than 10 runsTry free	medium	medium	Market size, service revenue, growth gap	Fewer than 10 runsFewer than 10 runs	Try free

The first three are acquisition cases with a corporate or fund buyer deciding whether to proceed and on what terms. The Car Wash Chain case has a private equity buyer and is adapted from a Columbia casebook. For a broader list across case types, see the case interview examples page, and for firm style, the Bain practice cases and the Bain case interview guide.

Run a real private equity case

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Practice the whole decision, not just the math

You have now seen one private equity case from prompt to price. The skill that transfers is the order: objective, market, position, levers, price, return, then a call with a walk-away number. Try it on a case you have not seen, where the numbers are yours to find.