Fund Raising – Tier I European Private Equity Firm – Infrastructure Fund

Request & Guidelines Provided

  • Asked to work closely with a Director of the fund to help identify, screen, and profile potential investors/ LPs across the world
  • Provided with the investment strategy for the infrastructure fund and broad criteria for identifying the potential LPs

Methodology

  • Sourced a list of existing global investors in the infrastructure sector using publicly available information. Used databases such as Preqin, Infraconnect, press searches, Bloomberg, and spoke to industry experts to make the list comprehensive
  • Phase II required us to narrow our focus on Sovereign Wealth Funds (SWF) as a type of potential LP
  • Created a detailed 40 page presentation with a focus on analysis of SWFs existing assets under management, investment and capital committed to infrastructure sector, geographic focus, and recent fund developments

Final Deliverable & Client Takeaway

  • Provided the client a forward looking analysis on the LPs (SWF) by categorizing the funds on a scale of high, medium, and low based on their existing exposure and appetite for infrastructure sector investments

Pre Deal – Leading Large-Scale Buyout Firm

Request & Guidelines Provided

  • Asked to work closely with a Principal in devising an India entry strategy
  • Phase II of the request required us to narrow our focus on particular sectors and companies
  • Provided with desired investment objective keeping in mind restrictions in terms of industries the fund was allowed to invest in

Methodology

  • Initiated the search by segmenting 10,000+ companies by different NIC codes
  • Sourced the list from multiple sources such as Bloomberg, industry associations, CMIE, and trade journals
  • Filtered the list down to 500 companies based on size and scale
  • As per client’s request, profiled 5 sectors to understand industry dynamics
  • Profiled 66 companies with a special focus on management and their affiliations, historical stock performance, company financials, operations, and valuation ratios

Final Deliverable & Client Takeaway

  • The client conducted management meetings with 15 Indian companies shortlisted on the basis of our analysis

Deal Structuring – Socio-Economic Private Equity Firm

Request & Guidelines Provided

  • Asked to support the Founder and Managing Director to evaluate a deal in the healthcare space as well as suggest the optimum capital structure to meet the fund’s expected return with minimum risk
  • Provided with fund’s strategy, expected return, company financials, and business projections

Methodology

  • Understood the business structure from Management to model the business
  • Made a 10-year quarterly model with separate financial statements for each of the 32 planned centers for expansion
  • Ran a sensitivity analysis on variance in EBITDA, change in cash flows and timing of cash flows, giving the fund a specific investment range
  • Generated a transaction analysis output sheet
  • Proposed optimum deal structure while being involved on calls with lawyers

Final Deliverable & Client Takeaway

  • Enabled the client to better evaluate the deal and negotiate the best value for his investment

Pre-Deal – M&A Pitch

Request & Guidelines Provided

  • Managing Director required an M&A pitch book for a meeting with a public real estate development company
  • The team worked independently on this project, creating all slides and pitch ideas

Methodology

  • Initiated the project with a brief macroeconomic environment overview followed by an analysis on the Egyptian real estate industry and shortlisted 10 real estate companies as acquisition targets based on qualitative factors
  • Analysed the LTM and forecasted gross and EBITDA margins and trading multiples based on Public Comparables and created an output sheet which supplemented in filtering the list from ten companies to two
  • Built detailed financial models, which covered all the ongoing and upcoming projects of the companies, and incorporated switches and cases for added flexibility
  • Calculated the synergies and impact on the capital structure of the merged entity
  • Prepared a comprehensive pitch which included sensitivities on the accretion and dilution versus the premium paid

Final Deliverable & Client Takeaway

  • Provided the client with a pitch book with recommendations for action and a working model showing the merger analysis
  • The client used our analysis to take the idea to the company

Deal Execution – Equity Raise

Request & Guidelines Provided

  • Supported the Investment Banker in a buyside mandate to advise an Asset Management firm on an equity investment in a Singapore based utility company
  • Prepared materials for the Asset Manager’s internal investment committee including the strategic rationale for the investment, while keeping in mind the tight regulatory procedures as well as stringent timeline provided for the deal closure

Methodology

  • Provided insights on the need for investments in the Asian water sector coupled with increased government commitment to developing an advanced water industry
  • Identified the importance of capital market structures, enabling evaluation of funding option for the sector in the long run
  • Highlighted the interest of long term pension and thematic investors in the water space on account of low volatility and attractive return profile of the utility infrastructure sector
  • Helped in restructuring existing business operations and capital structure

Final Deliverable & Client Takeaway

  • Provided research and analytical support to understand and analyse the regional water sector, supporting the Investment Bank to take informed decisions with regard to the investment strategy, restructuring of the existing business operations of the target company, as well as the equity/ management stake in the reorganized structure
  • Freed capacity of senior professionals at the Investment Bank which allowed them to continue their sourcing efforts for new deals while this deal was being executed

Deal Evaluation and Investment – Public Equity Fund

Request & Guidelines Provided

  • Asked to work closely with a Portfolio Manager to arrive at intrinsic value for a steel company
  • Provided name of the steel company, available secondary research, broad outline of the equity report, and preferred valuation methodology

Methodology

  • Constructed a financial model by understanding the intricacies of the company’s business and sector dynamics
  • Each of the company’s revenue streams were modeled and driven separately. The costs were reclassified keeping in mind their nature and relation to revenues
  • Used the DCF valuation technique to arrive at the company’s intrinsic value
  • Used guidance from ratios and multiples obtained from public market comparables to determine the value of the target company
  • Prepared a detailed equity memo using the top-down analysis of the company

Final Deliverable & Client Takeaway

  • Provided a flexible company financial model and equity memo to evaluate the investment opportunity

Deal Evaluation and Investment – Debt Asset Management Company

Request & Guidelines Provided

  • Asked to work with a Portfolio Manager to evaluate a new debt issue for an independent power producer, using credit fundamentals and comparable yield trends
  • Provided with road-show material of new debt issue, available credit research, and rating criteria

Methodology

  • Constructed a detailed financial model for the company and conducted due-diligence on key assumptions through secondary research on the company, industry, and macroeconomic environment
  • Used the client’s proprietary credit rating criteria to compute credit rating of the company for each forecasted year
  • Prepared a memo covering analysis of credit statistics, ratings, company’s financial profile, and debt maturity schedule
  • Analyzed yield spreads of the new bond using bonds of a similar structure, business and risk profile, and computed its yield spread over treasuries and interest swaps

Final Deliverable & Client Takeaway

  • Analyzed the credit fundamentals of the company issuing the bond and recommended a fair value range for the bond price based on which the client made the investment

Deal Execution – U.S. Based Telecom Company

Request & Guidelines Provided

  • Asked to support the CFO in evaluation of potential lenders for debt refinancing and acquisition of new markets
  • Provided with the term sheets and financial information of target markets

Methodology

  • Built a detailed and flexible model incorporating the financial information of potential targets to show the projected consolidated financial position of the company
  • Created a detailed transaction tab with easy to use switches, covering various terms of the deal such as stake purchased, purchase price, repayment schedules etc.
  • Modeled, evaluated, and reviewed the term sheets provided by different potential lenders by running the conditions through the model
  • Created an output sheet to scrutinize performance of the company as against the covenants placed by potential lenders
  • Tested the model to ascertain worst case scenarios and identify the margin of safety available to the company
  • Assisted in the creation of charts using the financial model used in the investment memorandum for presentation to existing investors and potential lenders

Final Deliverable & Client Takeaway

  • Provided a detailed flexible financial model with transaction tabs and output sheets to enable evaluation of the debt refinance and acquisition scenarios
  • Enabled the CFO to focus on running the deal and selecting the best term sheets presented to the company

Identifying and Evaluating Growth Opportunities – Media Entertainment Company

Request & Guidelines Provided

  • Asked to support the Channel Head in creating a Presentation to the CEO of the Conglomerate that identifies and evaluates growth opportunities in India
  • Provided with an outline of the presentation, primary and secondary data on industry specifics, and the indicative opportunities, requiring the study and analysis of mature markets, as well as current and expected trends in India

Methodology

  • Gathered and analysed data on the dynamics of the industry, global and local trends, target market, and companies catering to this segment, including parent company offering in the mature markets, as well as performance in India
  • Segmented and analysed the media value chain in India
  • Identified key competitors in the next step of the value chain, critical to the success of the company and provided a detailed profile on them, including case studies on the dynamics, trends, and recent strategies adopted by them
  • Evaluated new segments for expansion, as well as strategic partnerships
  • Worked closely with Management to create a Business Plan, and provided recommendations based on the findings and analysis

Final Deliverable & Client Takeaway

  • Delivered a detailed presentation containing the industry analysis, current and expected trends, study of target market, and key takeaways. Provided indicative opportunities for growth and expansion
  • Enabled the key decision makers of the company to take an informed next step decision regarding the mapping of long term strategy of the company in India