Growth Stage Personal Care/Beauty (think skincare haircare brands) Sell Side IB Modeling and Deal Process Questions. if you have experience, would appreciate your input

Hi, 

I have a coffee chat with an IB team that does a lot of sell side consumer product deals especially growth (with some mature) skincare/haircare/personal care brands. I have a deep interest in consumer retail and consider myself a market/product expert but I dont have direct finance professional experience in the space. I am curious:

1/ how would you structure your model if the company adopts an ommi channel strategy (DTC, third party ecommerce (TP) such as amazon/target, and retailer such as sephora, ulta). do you model revenue for DTC and TP channels at the customer level (Average Revenue Per User, Average Order Value. Life Time Value, etc.) then break out by products later on with using historicals and future expectations for breakdown by product? how about the retail channel? do u just assume a fixed margin, since you're selling to retailers at a discount but do not asume return/exchange risks)

2/ how about cost structure for each channel? other than product R&D, other there any costs that needed to be capitalized thus expense over time via D/A?. is costs associated social media sales such as click-through treated as advertising expense or cost of good sold?

3/what are some of the most important industry/operating specific metrics? 

4/PE buyout is an obvious one How does the modeling & valuation differ for strategic minority investments vs strategic buyout?

5/in term of deal process, are there any notable differences between the way sell side banks solicit potential investors (strategic minority investments ) or buyers vs the standard sell side IB? the industry is fragmented so i know that there are a handful of industry leading strategic buyers but curious about how your firm engage growth equity investors?

Much appreciate your input and any help u can offer!

1 Comments
 

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