A company with a capital lease would have a lower EBITDA multiple. A capital lease involves paying interest and principal repayments, which are both cash flows that happen below EBITDA. EBITDA would be higher as a result, and since EBITDA is in the denominator of EV / EBITDA, the multiple would be l...

A PE firm can incentivize management to stay by getting management to put up some equity for the acquisition, such that management owns 5-10% of the company. Another common method to incentivize management is with options. Options give management a percentage of the upside. For example, if managemen...

The advantage of being the only PE firm involved in the LBO is that you have complete control. You can dictate the type of debt financing to be raised and take full control when negotiating the financing terms with banks / institutions. You can choose whether or not to hire an investment bank as an ...

A capital call is when a portfolio company needs to go back to their investor(s) to ask for more equity investment. This could be to finance an add-on acquisition or a new growth strategy. A capital call may also occur if the company is simply low on cash and needs more capital to stay afloat [&hell...

A sale-leaseback involves selling property ownership to a third party and then renting that property back from that third party at a rate that was previously agreed upon. This is also a common way to generate cash to fund other projects. Companies may also wish to do this to reduce their real estate...