Consulting interview case on Private Equity investment.

Hi

Basically its a due diligence. In term of structure its probably the easiest since its always more or less the same issues to tackles

1. Check market attractivness

2. Assess target performance and future potential

3. Challenge BP + exit opportunities

So to answer your question :

5 things to know about the market

1.What is the target market : type of shoes (men, woman, kids, sports, high end), etc. and geography (spain only, europe, worldwide)

2. What is the size of the target market

3. what is the trends (past and future) of the targetted segment

4. How is competition structured on the targgetted segment

5. What are the different distribution channels and how are sales distributed

5 things about the target

1. How are we performing economically

2. what is ou market share and are we winnning / losing field over competition

3. Are we positionned on the right segment (based on trend x size x distriubtion channels)

4. How are operations performing ?

5. Is the company well positionned for the future trends

Hope this helps

Best

Benjamin

(editiert)

Hi,

I would start with clarifying questions:

1. Objective of the PE company (exit multiples, exit time)
2. PE company strategy (synergies with existing portfolio, expertise)

Then I will look at the following:

Market

• Size
• Growth rates
• Profitability
• Segments and growth rates, our segment
• Distribution channels

Competition

• Market shares of competitors and their segments (see the next point)
• Concentration / fragmentation
• Unit economics of the players (Margins, relative cost position)
• Key capabilities of the players (e.g. suppliers, assets, IP, etc)

Company

• Revenues and growth rate
• Profitability
• Unit economics (Margins, costs) i
• Brand
• Product mix
• Key capabilities
• Management team

Feasibility of exit:

• Achieving the objective (e.g. Exit multiples)
• Exit time
• Existence of buyers
• Risks

Best