Shipping

| Succesverhaal

Company valuation of a shipping and Services Company and UK based service provider – in preparation of a merger.

Issue

In September 2006 a major company in Shipping & related services wanted to expand their market share through a merger. Capgemini was hired to conduct an objective stand alone valuation of the Norwegian principal and the UK based target company.

The valuation was based on a discounted cash flow methodology. Future cash flow was based on historic performance and three scenarios for key value drivers. An educated approximation of a proper discount rate was calculated for respective companies.

Solution

Industry and company specific analysis was accomplished based upon available information, meetings with management at both companies and Capgemini’s industry knowledge.

A financial valuation model and sensitivity analysis was developed based upon historical data and future outlook of the industry and key value drivers.

The solution was deeply rooted in financial valuation methodology and Capgemini global best practise.

Ownership to the valuation estimates was established at both parties to ensure future commitment and common perceptions before final negotiations.

Benefits

The CEO was extremely pleased with the results, and commented that he had never seen a more educated valuation in terms of financial theory and industry knowledge.

The valuation procedure was well communicated and the key drivers and estimates was agreed upon throughout the process from both parties.

The client gave top score on CSI – Customer Satisfaction Index - 5x5.