• Market POSITION & competitive advantage: Before LBO, it’s important to know the market position & competitive advantage of the potential investment. The characteristics WOULD include high entry barriers, strong customer relationships & high switching cost.
• Stable & recurring cash flows: Without continuous and stable cash flow, no PE firm would buy an investment.
• Multiple drivers to trigger growth: This one is crucial. Only one DRIVER wouldn't propel the company to an extensive stage. More drivers, better-diversified growth strategies, and better execution would be essential for long-term growth.
• Strong MANAGEMENT: Most of the companies in the industry should have strong management team so that the PE firm can get strategic guidance toward better FUTURE.

These are the keys that a PE investor would look at before thinking of an LBO. Other than these, he would also look at changing habits of the customer, enhanced automation, application of disruptive technologies etc.

These are the keys that a PE investor would look at before thinking of an LBO. Other than these, he would also look at changing habits of the customer, enhanced automation, application of disruptive technologies etc.