Tell Me About a Deal You've Followed: PE Interview Answer
How to answer tell me about a deal you have followed in PE interviews: structure, thesis, risks, returns intuition, and a practice method that sounds like an investor.
PE · 5 min read
"Tell me about a deal you have followed" is a judgment interview disguised as a conversation. PE teams want to know whether you read like an investor: thesis, risks, valuation intuition, and what you would diligence next. News summary without a view fails. A view without facts also fails.
The short answer
"I followed [Deal]: [Buyer] acquiring [Target] for about [EV / multiple if known]. The investment thesis I underwrite is [two drivers]. The risks I would diligence first are [two risks]. On valuation, [entry context vs comps or precedent]. If I were an associate on the deal, my next asks would be [two diligence questions]. Net-net I would [lean in / pass / need more] because [one line]."
Fill every bracket. Empty brackets are why candidates ramble for four minutes and never land.
What good sounds like
Facts in 20 seconds
Parties, sector, announced size or multiple, status (announced, closed, or carefully labeled as rumor).
Thesis
Two falsifiable reasons the deal could work.
Risks
Two real kill issues, not generic macro.
Returns lens
Multiple, leverage capacity, or value-creation path at a high level.
Your call
Lean in, pass, or conditional, with one condition.
Pick the right deal to follow
Choose something you can discuss for five minutes without inventing. Best sources:
- A live process or closed deal from your banking group
- A public PE platform acquisition with enough disclosure
- A sector deal you tracked for months with filings or earnings
- A SheetRank practice deal you underwrote end to end (say so honestly)
Avoid deals you cannot discuss and deals you only know from a headline.
Build a one-page deal sheet
| Section | Content |
|---|---|
| Snapshot | Buyer, target, size, multiple, date |
| Business | What they sell, to whom, why sticky |
| Thesis | 2 to 3 bullets |
| Financials | Growth, margins, FCF, leverage |
| Risks | Concentration, churn, cyclicality, integration |
| Asks | Diligence questions you would own |
| Call | Invest / pass / need work |
If a row is blank, you are not ready for that deal in interview.
Thesis language that works
Weak: "It is a good company in a growing market."
Strong: "Recurring maintenance revenue plus pricing power in a fragmented aftermarket, with a clear add-on path that does not require heroic organic growth."
Make the thesis falsifiable. What evidence would kill it?
Risks that sound real
Macro uncertainty and execution risk.
Top customer is 28% of revenue with a contract renewing in 14 months; churn or reprice would break the case.
Name mechanisms: concentration, key-person risk, WC seasonality, regulation, integration, or leverage that only works if margins hold.
Valuation without a full model
You do not need a perfect LBO in the room. You do need intuition:
- Entry EV / EBITDA vs recent comps or prior deals in the sector
- Whether the multiple implies growth or margin expansion
- Rough leverage (turns of EBITDA) if disclosed or inferable
- Exit story: strategic sale, sponsor-to-sponsor, or IPO path
If numbers are not public, say what is known and what you would underwrite as a range.
Facts
20 sec
Thesis
2 drivers
Risks
2 killers
If you have no closed deal experience
Undergrads and early analysts still get this question. Use a public deal plus your own underwriting. Script:
"I have not closed a sponsor deal yet. I followed [Deal] for [reason], built a simple returns frame, and stress-tested [risk]. What I learned is [insight]. That is the muscle I want to use as an associate."
Honesty plus structure beats pretending you ran the process.
Follow-ups they will ask
- What would you diligence first in week one?
- What is the key value-creation lever post-close?
- How does this compare to another deal in the sector?
- Why would a strategic pay more than a financial buyer?
- What would make you change your recommendation?
Prepare one sentence for each.
Common traps
- Reciting the press release with no opinion
- Sounding certain about confidential details you cannot know
- Ignoring capital structure and talking only about synergies
- Choosing a mega deal you barely understand because it is famous
- Talking for five minutes before stating a recommendation
Sample verbal (60 seconds)
"I followed [Buyer] buying [Target] at roughly [X] turns EBITDA. My thesis is [driver one] and [driver two]. The risks I would diligence first are [risk one] and [risk two]. Valuation looks [tight / fair / cheap] versus [comp context], so returns need [ops lever or multiple discipline]. I would [lean in / pass] unless [condition]. As an associate I would own [diligence workstream] in the first two weeks."
Practice drill
Every Sunday, pick one announced PE deal. Fill the one-page sheet in 25 minutes and record a 60-second take.
Related
Use How to Read a CIM, PE Case Study Interviews, and Competitive Moat to sharpen thesis language. For the returns backbone, practice in the Paper LBO Academy course and drill on PE interview prep.
Practice on SheetRank
Treat Project Apollo like a deal you followed: write the five-part answer before you open Excel. Then underwrite and see which thesis bullets survive the model.
Practice on SheetRank
Apply what you learned with drills, guided Academy builds, and live deal underwriting.