Paper instructions:
You work a private equity firm specialising in turnaround situations.
Your supervising partner has asked you to write a report analysing the valuation of a small traded wines and spirits company, Blavod Wines and Spirits plc as a potential buyout target. You can access Blavod’s annual reports by clicking on the following link:
http://www.blavodwinesandspirits.com/investors/accounts
An extract from two recent broker’s reports on the company are attached as further background.
Task 1 (50%)
Corporate Valuation
Calculate the maximum price that your company should be prepared to pay, justifying your recommendation with appropriate valuation techniques and quoting appropriate financial ratios.
Task 2 (50%)
Buyout Strategy
Assume that your partner has decided to proceed with the buyout, and outline a strategy for improving the performance of the business. What can be done to improve these returns and where should management focus? Attempt to quantify what Blavod’s results might look like in three years’ time having applied this strategy.CLICK HERE FOR MORE ON THIS TOPIC
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