Lion Capital and Blackstone Essay Essay Example

Lion Capital and Blackstone Essay Essay Question 1: Why would Lion make a trade with Blackstone? Why would Blackstone make one with Lion? What does each hazard? What can each derive? Lion and Blackstone are fall ining together to leverage industry expertness and funding power. Lion has a strong apprehension of consumer-focused trade names and utilizing proprietary trades to turn an bing moderate-sized participant into a larger busines by utilizing it as a platform for acquisitions. Examples of such trades include Weetabix and Jimmy Choo. We will write a custom essay sample on Lion Capital and Blackstone Essay specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Lion Capital and Blackstone Essay specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Lion Capital and Blackstone Essay specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Blackstone has the power to convey really big funding into a trade. capable of puting up to $ 1 billion in a company. while besides holding an international presence. conveying synergisms across boundary lines. However. this partnership besides brings in a lagging gait in shutting trades and public visibleness and examination. Lion typically moves rapidly on trades. and already has decided in front of Blackstone on timing and monetary value. Blackstone. nevertheless. still needs to carry on due diligence and have the trade reviewed by the investing commission. Furthermore. Lion’s partnership with Blackstone brings it into the Financial Times’ forepart page and pressures it further to execute. Question 2: Is Orangina a good trade? It seems that Lion and Blackstone are paying a reasonably full monetary value ; what angle might the Blackstone-Lion pool have found to warrant it? Yes. Orangina is a good trade. for its trade name power. its resiliency. its financing-friendly nature. and its operating and distribution web in France and Spain. Orangina has iconic trade names that are good known in France and Spain. and it commands a strong presence in its niche without irrupting on the soft drink infinite of trade names such as Coca Cola. It can be levered easy. as it is in a defensive sector. has strong hard currency flows. and with touchable assets that can be claimed. Despite being undermanaged. it continued to execute good in bad times. bespeaking that it has a working operating substructure and does non depend on a personality to steer the concern. Furthermore. the squad has a good apprehension and tantrum with the company. Javier Ferran of Lion. a Spanish national who speaks French. is good suited to understand a company with operations concentrated in Spain and France. and is besides ideal for his past experience in the soft drinks sector. Question 3: Based on the information provided in the instance. how would you value Orangina? We will NOT value the company based on any price reduction hard currency flow theoretical account. including LBO rating or APV theoretical account. as we are covering with a private company. whose beta and future capital construction are impracticable to gauge. Private companies have no estimable beta. since they are non publically traded and are illiquid – their value does non travel in any way with regard to the market. There are besides no strong barriers to entry in a soft drink market. so terminal growing besides can’t be easy estimated. However. we can first try a simple Venture Capital rating theoretical account to acquire a speedy ballpark for our rating. We find that a sensible equity rating for a private equity purchaser lies between $ 900 million and $ 1. 9 billion. This implies an equity rating between 760 million euros and 1. 6 billion euros. With programs to put 900 million euros of debt. Orangina can be priced at 1. 7 billion euros to 2. 5 billion euros. We can presume that the 1. 85 billion euro rating of Blackstone and Lion is rather sensible. Question 4: What is the best trade attack? The squad needs to do a command that will do them one of the sure and approved purchaser campaigners instantly. even with the hazard of overpaying. They need to go one of the groups with entree to the Orangina direction squad and their advisers. and get down inquiring the inquiries they need answered on the company – such as the execution of a stable direction squad in a clip of a high direction turnover. the ability to turn in the nutrient channel or obtain higher command power in the out of nutrient channel. and a turnaround scheme for France. Given that Blackstone and Lion have a particular border that Lion’s squad understands the sector. the concern. and the geographics good. they should be willing to pay up forepart in the early auctions. so that they can extinguish strategic purchasers such as Pepsi. while besides detering other fiscal purchasers who don’t have the same degree of understanding. border. or angle on this sector. Once the likeliness of a trade is strong plenty. Blackstone and Lion can get down negociating a unequivocal amalgamation understanding with monetary values and footings that are a bit more suited and just for it. However. the current precedence should be to acquire into the bargain and cut others out every bit shortly as possible.