Interviewer view · keep this screen to yourself
Stretch: Should a fund buy Qasr Clinics?
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
Written case: a Gulf private-equity fund is considering buying Qasr Clinics, a chain of 20 outpatient clinics in the UAE. Using the data pack below, prepare a three-slide answer: is the deal attractive at the asking price, what are the main risks, and what should the fund offer?
The prompt refers to Exhibit 1. After reading it, say: "Open Exhibit 1 now."
Format note: Difficulty: Stretch. Format: written case, with a data pack. Industry: Private equity and healthcare. Region: UAE. Interview length: about 45 minutes. The company is fictional and all figures are illustrative. In a written case you usually get 30 to 60 minutes with a data pack, then present your slides and answer questions.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: What return does the fund need?
Answer: About 20 percent a year over five years.
If asked: How are clinics paid?
Answer: Mostly by private health insurers, at agreed tariffs per visit.
If asked: How will new clinics be funded?
Answer: From the company's own cash flow; the data pack shows debt at exit after paydown.
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
Clinic chains grow by opening sites, and the price looks close to what such businesses sell for. My hypothesis is that the plan gives a return near, but below, the fund's target, and that insurer tariffs are the key risk.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Value today, value at exit, and the fund's return
- Revenue and EBITDA today
- Entry price as a multiple of EBITDA
- Key: Growth plan, exit value, MOIC, and IRR
- Risk: insurer tariffs
Exhibit 1
The prompt uses this exhibit, so the candidate opens it right after you read the prompt ("Show exhibit 1" on their screen).
| Item | Value |
|---|---|
| Clinics today | 20 |
| Visits per clinic per day | 125 |
| Days open a year | 360 |
| Average revenue per visit (AED) | 400 |
| EBITDA margin (%) | 20 |
| Asking enterprise value (AED million) | 576 |
| Debt available at entry (AED million) | 288 |
| New clinics planned over 5 years | 10 |
| EBITDA per mature new clinic (AED million a year) | 3 |
| Debt at exit after paydown (AED million) | 188 |
| Expected exit multiple (EV/EBITDA) | 8 |
So-what
The price is 8 times EBITDA, and the plan adds about 40 percent more EBITDA through new clinics. Whether that clears a 20 percent return depends on the price paid and on insurer tariffs.
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Revenue today
What a strong candidate does: 20 clinics x 125 visits a day x 360 days x AED 400 per visit.
Revenue (AED a year): 20 × 125 × 360 × 400 = 360,000,000
Step 2: EBITDA today
What a strong candidate does: At a 20 percent EBITDA margin. The asking price of AED 576 million is 8 times this EBITDA.
EBITDA (AED a year): 20 × 125 × 360 × 400 × 0.2 = 72,000,000
Step 3: Exit value
What a strong candidate does: Ten new clinics each add AED 3 million of EBITDA once mature, giving AED 102 million in year five, sold at 8 times.
Exit EV (AED million): (72 + 10 × 3) × 8 = 816
Step 4: MOIC
What a strong candidate does: Equity at exit (exit value minus AED 188 million of remaining debt) divided by equity invested (AED 576 million minus AED 288 million of debt).
MOIC: (816 - 188) ÷ (576 - 288) = 2.18
Step 5: IRR check
What a strong candidate does: About 2.2 times in five years is roughly 17 percent a year, below the 20 percent target.
1.17 to the power of 5: 1.17 × 1.17 × 1.17 × 1.17 × 1.17 = 2.19
Step 6: Price that meets the target
What a strong candidate does: For 2.5 times the money (about 20 percent a year), equity invested must be AED 628 million divided by 2.5, plus the AED 288 million of debt.
Maximum EV to meet the target (AED million): (816 - 188) ÷ 2.5 + 288 = 539
Step 7: Curveball: insurers cut tariffs 5 percent
What a strong candidate does: The fund hears that insurers, backed by a revised regulator price list, plan to cut clinic tariffs by 5 percent. With costs unchanged, EBITDA falls by 5 percent of AED 360 million of revenue, and the value of today's business at 8 times becomes:
Value after a 5 percent tariff cut (AED million): (72 - 360 × 0.05) × 8 = 432
Step 8: Price that still meets the target after the cut
What a strong candidate does: With the cut, year-five EBITDA is at most AED 84 million (54 plus 30 from new clinics). This generously keeps AED 3 million per new clinic; new clinics are paid by the same insurers, so their EBITDA would fall too and the true price is lower still. With the same AED 288 million of debt, the price that still returns 2.5 times is:
Maximum EV after a tariff cut (AED million): ((72 - 360 × 0.05 + 10 × 3) × 8 - 188) ÷ 2.5 + 288 = 482
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Slide 1, the answer: the fund should not pay the asking price of AED 576 million, but the deal works at about AED 540 million with protection against tariff cuts. Today the 20 clinics earn AED 360 million of revenue and AED 72 million of EBITDA, so the asking price is 8 times EBITDA. With ten new clinics adding AED 3 million each, year-five EBITDA reaches AED 102 million and the exit value at 8 times is AED 816 million. After debt falls to AED 188 million, the fund gets about 2.2 times its AED 288 million of equity, roughly 17 percent a year, below its 20 percent target. Slide 2, the reasons and risks: first, the entry and exit multiples are both 8, so all the return must come from new clinics and debt paydown; second, the plan depends on opening ten clinics on time; third, a 5 percent tariff cut by insurers would cut today's value to about AED 432 million, because costs do not fall with tariffs. Doctors leaving after the sale is a further risk. Slide 3, the offer: bid about AED 540 million, the price at which the plan returns about 2.5 times, but only with protection against tariff cuts, such as a price adjustment or an earn-out tied to tariffs. If a 5 percent cut looks likely, the price that still returns about 2.5 times falls to at most about AED 480 million (lower if the new clinics also earn less), with the same AED 288 million of debt. As a next step, review the top five insurer contracts and the pipeline of clinic sites before signing.
Risks a strong answer names: Insurer tariff cuts; Delays in opening new clinics; Doctors leaving after the sale.
Next steps: Review the terms and renewal dates of the top five insurer contracts; Visit the planned clinic sites and check licensing timelines; Plan retention for senior doctors.
Strong versus weak
A strong answer
Built value from the data pack step by step, compared the return with the fund's target, found the price that works, and tested the tariff risk. The slides led with the answer.
A weak answer
Summarized the data pack line by line and ended with "the deal looks attractive because the market is growing," with no return calculation.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
Total
0 out of 25
Score all five criteria to see the band and the feedback template.