Usually, industries with stable cash flows and a tangible asset base are good for LBOs. For example, consumers, healthcare, and B2B services are common industries for PE. Software companies with recurring revenue who serve businesses could also be attractive; despite lacking a tangible asset base, they often have very sticky customers because they provide mission-critical services which have high switching costs.
Private equity firms may also specialize in industries such as infrastructure which have contracted revenues and highly predictable cash flows. This makes it easier for these types of companies to make debt service payments while generating a predictable return.