A European client was looking for some help on creating a pitchbook concerning merger of two tech firms considering the consolidation trend in this Industry.
The client wanted to understand the kind of merged entity that would be formed and the valuation it would command in view of the current valuation trends in the industry.
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.
Value Delivered
Our research suggested that the merged entity formed would rank among the biggest players in the region, increase business for each by 50% and 200% and their individual offerings would be complementary to each other.
The output involved 17-18 pages for the client to use in the pitchbook based on the client’s formatting requirements.
