Tiêu đề InvestCo Financial Model Test (PART 1).pdf ✅

1 Memorandum To Prospective Candidates From Investment Holdings PLC (“InvestCo”) Re: Financial Modeling Test You will have approximately FOUR hours to build and complete a five-year take-private financial model with returns analysis and recommendations. We have listed the assumptions below for the analysis and have filled in the relevant historical data in the attached excel file titled “CAP Historical Financial Statements”. We have also provided you with historical annual reports of the company with industry reports that you may use as you see fit. Please footnote any assumptions on the numbers or calculations that you need to clarify. Show all of the detail behind your work and make sure that all calculations are linked up to your financial model. If you have any questions, please call me on my cell phone +234 810 543 4098. Proposed Deal Background You are an Investment Professional at Investment Holdings PLC (“InvestCo”). It is January 2016, and the Group Managing Director has just approached you to consider a potential buyout of Chemical and Allied Products Plc (“CAP”). a leading paints and coatings company listed on The Nigerian Stock Exchange. He has a meeting in FOUR hours and requires you to provide some indicative views on transaction structure, expected returns potential and other considerations that may inform his views on the investment opportunity. Transaction / Capital Structure Assumptions 1. Assume a December 31, 2015 closing date for the transaction, making the 2015 financials the last historical year. 2. Assume InvestCo will acquire 100% of CAP at an acquisition price of 20% premium to last traded share price of ₦37.60 as at 31 December 2015. Note that proceeds will be paid out to existing shareholders. 3. Assume InvestCo will finance a portion of the acquisition using debt, which will be “pushed down” on CAP’s balance sheet on transaction close. For debt financing purposes, assume 5.5x EBITDA of total leverage consisting of: a. 3.0x EBITDA of 5-year Naira denominated Senior Bank Debt at 18% interest rate. b. 2.5x EBITDA of 7-year USD denominated Mezzanine Debt at 12% USD interest rate (note the loan is in USD and will be repaid in USD). c. Include a Naira denominated revolving credit facility at 22% interest rate, which should be unfunded at closing.