Private company valuation and origination screening support for a Private Equity Firm.
About Client:
A UAE-based private equity firm was constrained with bandwidth during the peak period. Hired ValueAdd for doing a private company valuation with an objective of acquiring a substantial stake.
As a value-addition, we also developed a feasibility framework for them to quickly review their inbound investment requests by entrepreneurs.
ValueAdd Solution:
ValueAdd staffed a private equity analyst supported by a Team Lead, to provide the required valuation and origination support. The analysts had an average 3 years of experience in delivering private equity deals.
Deal origination support (scrutiny of inbound requests):
- Developed a standard framework to review the inbound requests for investments.
- This was a quick feasibility study to separate the wheat from the chaff.
Deal execution support including private company valuation (Intrinsic & RV):
- The company was one of the largest multi-specialty hospital based in Saudi Arabia with hospitals across GCC
- ValueAdd equity specialists got access to company’s private filings across finance, HR, Admin, strategy departments, through the data room.
- Did a detailed study of macro-economic environment and the GCC healthcare industry to understand the current health and the future outlook. The outlook was positive, due to drivers including government incentives, medical tourism, availability of professional specialists, and advanced technology
- Built a Football field to arrive at a reasonable range of valuation using different approaches like DCF, SOTP of all hospitals, and relative valuation (trading and transaction comps)
Market intelligence and library support:
- Provide market intelligence, including monthly report on new private deals, sector newsletters, and competitive intelligence.
- Provide library/data support including supplying required data, sector reports, broker reports, rating reports, and other ad hoc pieces of analysis (sensitivity analysis).
- Graphical support across charts, slides, decks, and data as per the client’s formatting style guides.
Benefits Delivered:
- The client acquired a majority stake in the company based on the valuation recommendation.
- The feasibility study helped their team spot a couple of good investible companies on time. The delay would have resulted in a missed opportunity!
- Inhouse and outsourced team-mix facilitated relatively quicker turnaround time than Do-It-Yourself option.
- High quality research support with investment recommendations offered value for money.