ABI HELPS A PRIVATE EQUITY FIRM IN INVESTMENT EVALUATION IN E-COMMERCE SPACE
A leading Private Equity firm in Asia-Pacific wanted to evaluate the Indian E-Commerce & Internet Enabled Businesses space for potential investments. The PE Client was looking for end-to-end support on deals screening and deal evaluation support from ABI analysts.
SCOPE OF WORK
The client needed support across the deal cycle and the proposed scope of the work included:
- Market opportunity assessment
- Shortlisting potential deals
- Deep-dive analysis on shortlisted companies
- Financial modelling and investment recommendation
- Due-diligence support
- Deep-dive valuation with sensitivity & scenario analysis
- Research support for negotiation
- ABI deployed a multi-disciplinary team of domain experts and technology consultants to help the client across the deal cycle.
- ABI team screened 10+ sectors with deep-dive analysis to evaluate Industry Attractiveness given the Indian macroeconomic and demographics profiles. These sectors were then compared on their relative attractiveness to each other.
- ABI Team screened 200+ Indian e-commerce companies across the identified domains to prepare a shortlist of 12 names. For these 12 companies, ABI conducted a high-level evaluation of their business model, financial performance, website traffic, conversion rate, unit-economics etc. to benchmark performance and business viability. After this exercise – 5 companies were selected for potential investment discussions
- Domain experts with deep-dive financial modelling expertise studied key business drivers and future visibility – macroeconomic analysis, domestic consumption and key drivers thereof, profit pool analysis across segments, competitive landscape analysis, digital access and consumer behavior, market survey and assessment etc. All these studies included scenario building, risk assessment and impact analysis. This analyst also translated all business drivers into incisive financial models and developed a financial-tool to support negotiation discussion
- Technology experts studied the business model of the Indian e-commerce players, their key differentiators vis-à-vis local and global competitors etc. The objective was to understand if these players can attract and retains their customers and run the business in cost-optimal mode based on deployed technologies.
- ABI team worked on-site with PE and Investee firms to support due diligence and other related aspects of the deal
- The client leverages out analysts and domain experts on project basis thereby maintaining a lean and cost-effective structure
- Time-efficient as multiple teams were able to work on different aspects of the deals, making the client’s team to focus on negotiations and meeting while ABI took care of all the research work
- Continuous communication and discussion on interim deliverable meant that the entire deal team was aligned with the same objectives