An American client wanted some help in pitching for a mandate where an Asia based consumer company was rumored to be up for sale by its global parent.
The client wanted to get a detailed understanding about the company and its regional standing as well as the takeover rules and regulations that would be applicable in the region.
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.
Value Delivered
The output involved a financial model with different scenarios (Base, upside and downside), Sensitivity and football field analysis.
Figured out the post-merger valuation of company at EV/Adj. EBITDA multiple of 4.2x through Football field analysis.
