Business valuation for investment banking firm

Business valuation for investment banking firm

CLIENT

An investment banking firm with headquarters in the Middle East.

OPPORTUNITY

The client was seeking support in evaluating the pipe business of a global conglomerate based in Hong Kong. The conglomerate carried out operations via two entities in the UAE. SG Analytics’ project scope included a merger analysis of the two entities, followed by a valuation across various methodologies.

SOLUTION

SG Analytics understood the client requirements in detail and implemented the following solution:
  • Assess the business structure of the two entities, including the management structure, and modeling the business.
  • Forecast a 5-year semi-annual model with separate financial statements for each of the two entities and subsequently merge the financials to form a merger model.
  • Calculate the synergies and impact on the capital structure of the merger entity.
  • Analyze sensitivities on the accretion and dilution versus the premium paid.
  • The model 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 included company comparables and precedent transactions
  • Calculated the enterprise value using different weightings.
  • The output involved different scenarios (base, bear, bull), sensitivity analysis, football field analysis and key ratios.

Value Delivered

  1. SG Analytics enabled the client to better evaluate the deal with a working model showing the merger analysis.
  2. The client used SG Analytics’ analysis to advise its end client.

Value Delivered

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1
SG Analytics enabled the client to better evaluate the deal with a working model showing the merger analysis.
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2
The client used SG Analytics' analysis to advise its end client.