Financial Analysis and Shared Services Case Studies
Provide Independent M&A Valuation for Client
Client: A global leader in premium kitchen faucets, bath faucets, showers and shower systems.
Business Situation: Client had hired a major investment banking firm to assist in all phases of a potential acquisition in an emerging market where it had no presence. As clients F&A organization had no M&A experience, nor available staff, the investment banker given responsibility for tasks traditionally performed by clients F&A organizations, including all valuation.
Clients CFO became concerned that:
- A substantial portion of the bankers compensation depended on successfully completing the deal, and;
- Valuation and recommended opening bid appeared too high.
Business Need: The CEO & CFO wanted an independent valuation of the target before seeking Board approval to proceed with an offer.
Why Robert Hunt (current CCC Consultant) was hired: The CFO was familiar with Robert Hunts Corporate Finance role at Procter & Gamble in which he provided P&Gs CEO and CFO with independent valuations and risk assessments for major investments (including M&A) submitted for approval by P&G businesses.
Consulting Project: Robert Hunt was hired to provide a comprehensive valuation of the proposed target, together with a risk/opportunity assessment.
Consulting Outcome: Robert Hunts valuation analysis was significantly below the investment bankers, reflecting the following:
- Significantly overstated synergy
- Country risk
- Investment bankers valuation was based on stretch or best case market and market share growth rates rather than most likely
The Client decided not to pursue the acquisition.
Contact Information
Call or email Dick Bruder, CCC President/CEO, at (513) 233-0011 or dbruder@cincconsult.com or Tim Biehle, Senior CCC Consultant at tbiehle@cincconsult.com or at 513-984-9875.
