IS2 Valuation and Acquisition Support

The objective of the project was to perform valuation of IS2, Eurobank’s data center subsidiary company based in Bucharest, on behalf of the Client, based on financials’ consolidation and more importantly based on value creation potential through synergies’ evaluation. More specifically, the project included the following tasks:
• Assessment of target’s business plan

1. Assessment of the projected financial plan
2. Review underlying assumptions
3. Challenge the financial targets of the business plan

• Assessment of synergies and additional value creation initiatives

1. Evaluation of potential synergies and exploitation of opportunities for growth

• Consolidation of financials and target’s valuation

1. Consolidation of assumptions and associated forecasts on the revenue and cost side
2. Development of a consolidated financial model and assessment of the financial performance of the target
3. Conduct a financial valuation, for target operations, using DCF analysis and determine NPV
4. Compare to other valuation methods such as comparables and multiples
5. Determine overall profitability and key ratios such as payback period, ROI etc
6. Perform sensitivity analysis and determine the appropriate bid value range which yields an acceptable return

• Assist in bidding strategy and pricing as well as in negotiations with the seller

1. Using scenario analysis in order to provide input for bidding tactics and pricing strategy
2. Discuss findings with the Client and agree on the recommendation for the bid valuation as well as on the key conditions which should be stated in the commercial offer.
3. Provision of ongoing technical and business support during the negotiations

Services Provided:

• Creation of a financial model that was used for valuation purposes.
• Incorporation of financial data, both historical and budgeted
• Discussion with the investor regarding alternative assumptions, scenarios and associated forecasts on the revenue and cost side as well as on the company’s capital structure and creation of alternative acquisition scenarios.
• Valuation of IS2 on the basis of those alternative acquisition scenarios.
• Discussion with the investor regarding the best scenario for the bidding and preparation of the bidding proposal.
• Presentation of the proposal to Eurobank’s executives in charge with the disposal of IS2
• Continuous support during the negotiation phase.