Due Diligence on Prospective Target Engaged in QSR Business for EMEA-based Client

  • Delivered fast turnaround for a competitive deal

  • Provided real-time support

  • Highlighted gaps in the existing valuation

  • Enabled the decision-making process with a comprehensive financial model

CLIENT CHALLENGES

  • The client was advising on a buy-side Quick Service Restaurants (QSR) business transaction in the Middle East, but lacked resources and bandwidth to conduct financial due diligence
  • It required a quick turnaround, as the target was in talks with other prospective buyers at the same time
  • Key requirements were the following:
    • Understanding and verifying the business plan prepared by the target’s management
    • Transforming the financial model to facilitate comprehensive analysis by the client’s partners
    • Carrying out analysis based on the relative valuation and DCF methods
    • Integrating sensitised valuation drivers into company financials to derive the implied valuation

OUR APPROACH

  • Scoped the work and assigned an expert financial modeller to the project, with a senior subject matter expert providing guidance and oversight
  • Reviewed all material received from the target’s management, including financial statements and management projections to decode the business model, key drivers, proposed deal structure and the target’s industry
  • Conducted secondary research to validate drivers and assumptions and shared key findings and other variations with management
  • Identified key factors for valuation and incorporated two new cases to assess the downside and upside valuation ranges
  • Arrived at the valuation range using different approaches and different cases

IMPACT DELIVERED

  • Acuity Knowledge Partners conducted a thorough analysis of the company, providing the client a detailed valuation, along with other relevant findings
  • The team identified and highlighted gaps in the management case, which were earlier unaccounted for
  • The questionnaire prepared by the team helped the client better understand certain finer nuances related to the business
  • The flexible valuation model helped the client’s team run concurrent multiple scenario simulations for a comprehensive valuation view
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