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| Knowledge Centre |
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| Case Study 6 |
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- OBJECTIVE:
Quandary study of a software development and integration services firm.
- BRIEF:
A private equity player is considering acquiring a stake through a private placement in a Canada based software development company. He wants a complete background study pertaining to the same.
- ACTION:
Global Strategy & Investment Consulting (a division by India largest multi-interest consulting firm - Planman Consulting) was appointed to execute the study and opine about the investment proposition.
- APPROACH:
The approach for this project was secondary in nature where GSIC used proprietary knowledge banks and public domain information to find the issues involved in the company and suggest solutions.
- REQUISITES: The client required the following:
- Company Overview
- Business model review
- Market and Industry outlook
- Competitive Landscape
- Valuation Target
- METHODOLOGY:
The project was kicked off with details of the company and the investment specifications. A comprehensive secondary research was done with respect to the different factors and segments involved in the project. GSIC was to come up with a rational conclusion based on the research facts and estimations.
- OUTCOME: The overall outcome of the project entailed the following:
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Deliverables - A comprehensive report which entailed:
- Company background
- Operational facts
- Issues confronting the company
- The solutions
- Valuation (DCF - FCFE)
- Valuation (Relative)
- GSIC's recommendations
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Result - The analysis suggested that the company will may not be able to sustain its competitive advantage of low costs because of a growing Indian presence. The valuation suggested that the stock still had a potential to grow at reasonable levels. Although, the company would take some time to revive from the previous losses, it seemed like a healthy proposition for the long-term.
- POST-MORTEM REVIEW:
The deliverables proved to be extremely effective and the client was clear about most issues of the project. He was able to successfully frame a decision regarding the investment and come up with a reasoned investment outlook in the company.
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