Opportunities and their downside risk
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It's Risky to Be a Creditor in This Private Equity World
83% of mergers & acquisitions fail. Most deals have 2-3 year retention, vesting, and re-vesting programs, and potentially 2-3 year earn-outs.
You always have to think about the margin for safety, regardless of the type of investment. What happens if it doesn’t turn out the way you’re thinking?
Executives always sound bullish. A whole range of synergies will be achieved. Instead, the combined companies tend to suffer from clashes of culture and teething problems as systems prove hard to integrate.
Blind faith in the high equity return cult will lead to disaster.
The private equity bubble is bound to burst.
An analysis of 2,500 such deals by our firm shows that more than 60% of them destroy shareholder value. Perhaps such deals should come with an official warning:Acquisitions can result in serious damage to your corporate health, up to and including death.
The value of a systematic Approach
Defining a strategy
Defining a risk adjusted price
understanding the risk profile
APPRAISING INTRINSIC VALUE
Ensuring transaction viability
ALLOCATING RESOURCES EFFICIENTLY
VALIDATING INTRINSIC VALUE SUSTAINABILITY
What we do & How we do it?
Driven by data, discipline & diligence
We define — The Intrinsic Value
We back our assumptions with quality data in order to apply fundamental valuation methods that best define an investment’s risk adjusted price.
We increase — Probability of Closing
Backing rationale with significant data, promoting a risk adjusted offer, organizing a comprehensive and transparent data room and adding valuable third party inputs.
We support — Our Clients
Post transaction through monitoring KPIs, defining or assessing periodic reporting documentation and providing external governance services.