Case study

Business Valuation for the Pipe Business of a Hong Kong-Based Global Conglomerate

Business valuation

Business Situation

  • Supported one of the Middle East-based IB firms in valuing the pipe business of a Hong Kong-based global conglomerate for a merger.
  • The project involved conducting a merger analysis of the two entities to understand the accretion effects of the deal followed by valuation across various methodologies.

SGA Support

  • Understood the business structure of the two entities from the management to model the business.
  • Provided forecast of a five-year semi-annual 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 the impact on the capital structure of the merger entity.
  • Analyzed sensitivities on the accretion and dilution versus the premium paid.
  • Prepared a model that involved building out revenue, loan, balance sheet, and fixed asset assumptions and schedules to project the financial statements followed by a DCF analysis.
  • Market-based approach, which included company comparables and precedent transactions.
  • Output involving building different scenarios (base, bear, bull), sensitivity analysis, football field analysis, and key ratios.

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