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Deloitte Value Creation Services Interview

Deloitte Excel case study Value Creation
New answer on Oct 09, 2023
2 Answers
6.5 k Views
Anonymous A asked on Jul 23, 2018

Hi, I am aware there are similar posts out there on corporate finance or private equity interviews, but does anyone have experience in value creation services interviews (final stages - excel case study etc.) at Deloitte? How can I best prepare this?

Thank you

(edited)

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Vlad
Expert
replied on Jul 24, 2018
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Based on the description, it may be closer to the PE / IB M&A interview that is much more technical and detailed in the financial part. Usually, they give you much more time to prepare and do the valuation on paper / excel. Depending on the company you'll need to:

  • Find the relevant information in P&L, Balance sheet, CF statement
  • Do the simplified valuation using NPV: calculate cash flows and make assumptions about growth rate and discount rate
  • Do the valuation using comps - you'll have to explain which comps you will use and why
  • Do the valuation of the synergies
  • Play with different scenarios (e.g. how the stock-price will change if the deal terms leak into media, or how should the companies behave in a bidding process)

There are two types of frameworks you may use:

  1. Commercial due-diligence of the target company
  2. Synergies calculation of two merging companies

Note also that it can be a mix of both.

1. For Due Diligence you can use the following structure:

Market

  • Size
  • Growth rates
  • Profitability
  • Segments
  • Distribution channels

Competition

  • Market shares of competitors and their segments (see the next point)
  • Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
  • Unit economics of the players (Margins, relative cost position)
  • Key capabilities of the players (e.g. suppliers, assets, IP, etc)

Company

  • Unit economics (Margins, costs) in current or target markets
  • Brand
  • Product mix
  • Key capabilities

Feasibility of exit (in case of a PE company):

  • Exit multiples
  • Exit time
  • Existence of buyers
  • Risks

2. For Synergies Calculation you can use the following structure:

  1. Revenue synergies - here you calculate the synergies in price and quantity (depending on the case it may be new geographies, new products, new distribution channels, bigger share on shelves crosselling opportunities, etc.)
  2. Cost synergies - typically you use a value chain structure tailored to the industry (e.g. supply-production-distribution-marketing-after sales support)
  3. Financial synergies - working capital, capital structure, tax
  4. Risks - major risks that can decrease the synergies (tip: don't underestimate the merging companies culture factor)
  5. Total synergies potential in $, adjusted by risk (probability of failure)

Good luck!

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Benjamin
Expert
Content Creator
replied on Oct 09, 2023
Ex-BCG Principal | 8+ years consulting experience in SEA | BCG top interviewer & top performer

Hi,

Sharing my perspective in case this question is useful for others as well. Value creation teams typically are responsible for unlocking additional EBITDA once the target has been acquired/investment as been made.

As such - your job will be focusing on implementing and driving topline or bottomline initiatives and projects. 

The interviews therefore are likely going to test your ability to do the following:

  • Use business judgment/sense to identify revenue or cost improvement opportunities
  • Use quantitative thinking to generate quantified estimates of these upsides
  • Use relevant experience to think about the practicality of the ideas and the process that needs to happen to ensure the initiatives are successful

Above is based on PE ops / value creation interviews that I attended.

All the best!

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Anonymous B on Jan 16, 2024

Hi Benjamin, Thats an helpful answer and I maybe looking at a prospective interview (not sure, but want to be prepared). Can you help me locate any sources where I can prepare for a value creation case-study?

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