Investment Banking

JMI Implementation

• Understood the business structure of two entities from the management to create a business model.
• Forecasted a 5 year quarterly model with separate financial statements for each of the two entities and subsequently merged the financials to form a merger model.
• Calculated the synergies and impact on the capital structure of the merger entity.
• JMI team examined that the merger would result in saving operational cost of c.$4M and also bring monopoly in the market.
• Valued the company with DCF method and market based approach including company comparable (EV/EBITDA, EV/Adj. EBITDA and P/E multiples) and precedent transaction.

JMI Implementation

• Provided high level overview of sector trends, outlook and its key drivers like 5G implementation and mobile phone penetration.
• Conducted detailed fundamental research on company financial report to get insights on revenue growth, cash flows and other KPIs. Also, identified the catalyst and key risk factors with its mitigate for business.
• JMI team identified that the company will grow at c.6% CAGR in next 5 year with its ARPU increasing from 42 USD to 48 USD.
• Provided an insight on competitive landscape and constructed a benchmarking model across key metrics like market share, ARPU, and customer base etc.

JMI Implementation

• JMI team extensively reviewed the lending company from an operational, financial and market perspective.
• Identified the comparable companies with similar asset size and loan portfolio and derived the P/B multiple of comparable companies.
• Figured out the pre-money and post-money valuation at P/B multiple of 2.1x and 3.3x respectively.
• Developed pre-deal presentations including acquisition thesis and investment highlights.
• JMI also supported in investor / buyer search and involved in virtual data room management.

JMI Implementation

• JMI team identified a list of relevant target companies using an exhaustive screening process involving multiple data sources (such as Capital IQ, Factset, Refinitiv and Pitchbok), industry reports and industry associations.
• Benchmarked shortlisted companies across various key parameters including historical revenue, employee growth, funding rounds and management experience.
• Delivered company profiles of the potential 4 target companies covering key business information, segments and financial details that would help in better target evaluation.
• JMI also helped the client in scheduling the meeting with key management of target companies.

JMI Implementation

• Conducted detailed performance analysis on portfolio and found that the invested value of $250M fell 15% in value. However, dividend received during the period provided the portfolio MoIC of 1.24x and XIRR of 2.2% over 12 year of holding period.
• JMI team conducted in-depth analysis of each company and their past dividend pay out. JMI team identified that out of 18 companies, 10 companies had MoIC > 1 and positive IRR. The rest of the 8 companies had a negative return on invested capital.
• Conducted relative performance analysis with global indices. JMI team calculated the MoIC for S&P 500 and FTSE 100 would be 2.5x and 1.8x for duration of 12 years on same invested amount.
• Based on the analysis, JMI recommended the sale of 6 underperforming companies based on past performance and future growth prospects.
• JMI also carried out the liquidity analysis on underperforming companies and identified that one of their investment in the company would take ~50 trading equivalent days for sale on their exchange and two of their companies would take more than 10 days for the stake sell.
• JMI recommended the client to find a strategic buyer for the sale of one company having low liquidity and assisted the client in gradual sale of its stake for remaining 5 companies on stock exchange.

JMI Implementation

• Analyzed Energy sector’s performance, correlation of the firm’s SP with oil price, evolution of broker consensus valuation and trend of daily trading volume as a % of free float of the firm.
• Created a detailed business profile covering business overview, segmental analysis, operational presence, ownership structure, debt maturity profile, detailed financial summary with a focus on fundamental cash flow, sources & uses of funds and future capex plans, among other details.
• Prepared a football field analysis showcasing valuations based on peer comp set, precedent transaction, and analyst consensus to arrive at a range of the Company’s implied valuation.
• Created a couple of pages on the macro trends of its operational markets and Energy sector as well as created mini profiles for potential financial and strategic buyers.

JMI Implementation

• We mapped the combined geographical coverage of the two companies showcasing new markets that they would each get access to as well as mapped their combined products and services highlighting complementary offerings.
• We analyzed how valuation trends across different segments of the industry evolved over time we plotted daily rolling comps for both LTM and NTM EV/EBITDA for each sector across time.
• We generated a set of trading comps, precedent transactions as well as modelled a DCF analysis using pro-forma financials to arrive at a tentative valuation range for the combined entity.
• The analysis of synergies was a separate step from the valuation analysis and cost savings realized in historically similar mergers and used that as a benchmark to judge and analyze the possible synergies for our merged entity.

JMI Implementation

• We created a detailed profile for the company and benchmarked its key variables against regional players including factories, output, products, pricing, customers, geographical coverage among other key details.
• We analyzed overall investment cash flows by the Parent Company over the years to this regional company and estimated an IRR of c.12% that would generate based of the rumored asking price.
• Because the client had no previous experience in this region, we provided a summary document detailing key takeover rules and methods commonly used in the area.
• We also analyzed previously completed takeovers in the region to understand the disclosures and methods used in finalizing those deals.

JMI Implementation

• We were able to generate an extensive list of possible targets identified using databases, news runs, company filings of major players with asset disposal plans and PE portfolio companies where the PE is possibly at the end of its holding period and could look to exit the target.
• We further created profiles for 10 possible targets based on the final selection by our client. The profiles covered business overview, key segments, products and offerings, key developments, ownership, geographical coverage, key financials, among other details.
• We also investigated each target to check how complementary it would be once incorporated into the segment and the degree to which the target owner is willing to sell.