Transaction Services Interview Case Study: A Worked Example
A complete worked example of a Transaction Services interview case study: EBITDA bridge, net debt and EV/Equity bridge with sample data and commentary.
Here's a simplified worked example of the type of case study you might encounter in a Transaction Services interview. The numbers are illustrative, but the structure and logic are exactly what you'll need to apply in a real interview or assessment.
The scenario
You are advising a financial buyer on the acquisition of Tekford Solutions, a B2B software and services company. You've been provided with three years of management accounts and a data pack. The buyer is considering a 7x normalised EBITDA multiple. You've been asked to (1) calculate normalised EBITDA and (2) construct the EV to Equity bridge.
Year N financial summary
| P&L Line | EURk |
|---|---|
| Revenue | 9,800 |
| Cost of sales | –4,700 |
| Gross profit | 5,100 |
| SG&A | –1,850 |
| Reported EBITDA | 3,250 |
Management's proposed adjustments
- EUR 320k of M&A advisory fees included in SG&A.
- EUR 180k one-time payment to departing COO.
- EUR 240k software development costs capitalised (management states these are maintenance in substance).
- EUR 150k annualisation of new Head of Sales hired 1 October (only 3 months in the accounts).
- EUR 420k full-year EBITDA from a small business acquired 1 September.
Constructing the EBITDA bridge
| Adjustment | EURk | Category | Notes |
|---|---|---|---|
| Reported EBITDA | 3,250 | — | Starting point |
| M&A advisory fees | +320 | One-off | Confirmed by invoice |
| COO departure | +180 | One-off | HR agreement confirmed |
| Capitalised maintenance | –240 | Presentation | Maintenance in substance per IT team |
| New Head of Sales annualisation | –113 | Run-rate | 9 months remaining × EUR 150k/12 |
| Acquisition annualisation | +420 | Pro-forma | September acquisition, verify with carve-out accounts |
| Normalised EBITDA | 3,817 |
At 7x: Enterprise Value = EUR 26.7m.
The EV to Equity bridge
Balance sheet data:
- Bank debt: EUR 3,200k
- Finance lease liabilities (IFRS 16): EUR 420k
- Cash: EUR 680k
- Unfunded pension deficit: EUR 290k
- NWC at closing: EUR 1,150k vs peg of EUR 1,380k (shortfall of EUR 230k)
| Line | EURk |
|---|---|
| Enterprise Value | 26,719 |
| − Bank debt | –3,200 |
| − Finance leases | –420 |
| + Cash | +680 |
| − Pension deficit (debt-like) | –290 |
| − NWC shortfall | –230 |
| Equity Value | 23,259 |
What this example teaches you
On the EBITDA bridge: note that the capitalised maintenance is a deduction, not an add-back. Not all adjustments benefit the buyer. The pro-forma acquisition adjustment is the most contestable item — in a real deal, you'd verify the EUR 420k with detailed carve-out accounts.
On the bridge: the pension deficit is a debt-like item that reduces equity value pound for pound. The NWC shortfall is an adjustment for delivering less working capital than contractually agreed.
In the interview: the ability to walk through this kind of exercise — live, under time pressure, with numbers — is what separates prepared candidates from unprepared ones.
The programme's case studies include 8 complete exercises at this level of detail, with full data packs and model solutions.