What to prep for my boss?

I'm a rising sophomore interning in the PE department of a pension company. We invest in funds and participate in co-invests alongside GPs but we also source and raise our own deals. My senior portfolio manager was traveling when one of his friends told him about an opportunity to buy a private company. He thought it sounded interesting and threw it down to a guy on his deal team who gave it to me. He wants a slide deck with research about the company. Any advice on what should/shouldn't be included in the deck and sources of information besides the website and cap iq that I might not have heard of? Thanks in advance for any help - I'm the youngest intern they've ever taken and I'm hesitant to ask too many questions as I'm trying to get asked back.

 
Best Response

It looks like it's your chance to show your potential!

Here's a list I've found somewhere: 1. Executive Summary -> investment thesis, why the company, industry average growth rate, brief growth strategy and exit strategy 2. Source of deal - Background of seller and reason for sale (retirement/spin off etc) 3. History of the business 4. Products and Services - Top products, their margins and % of total revenue 5. Suppliers and customers - % of total revenue 6. Detailed breakdown of company's daily operations and how they go about doing things e.g. sales and marketing (what are their plans/processes) 7. Org chart + Management team + scoring/review 8. Detailed Industry overview - Industry growth and growth drivers. Competitive landscape 9. Detailed growth strategy e.g. what you plan to do with the company after buying it to get your IRR 10. Investment risks e.g. FX 11. Company financials - projections + public comps + M&A comps + lbo (base case, management case and what you think is right/your company) Extra things that you can add in include: - Overview of country if you are entering a new market - FX graphs - Overview of economic policies and political issues in the country - Any potential CEO/CFO lined up through headhunters - DD process timeline and expected completion date - Financing of the deal - Potential targets if your company follows a "buy and build strategy"' - Sensitivity tables

Starting from this very comprehensive list, you might want to adapt a bit the content, depending on the business/situation. Your goal is to provide all the relevant information to allow the decision makers to understand about the company, how it makes money, how it competes with/differentiates from the peers, how stands in the market and so on.

As for the sources, over the website of the company itself and Cap IQ, you might want to have a look at what's going on in the industry/sub-sector (through associations, for instance). Another great source is typically the financial statements of other listed companies in the field.

 

This is a pretty solid start.

As you do more of these, you'll get a sense for which sections to expand or contract. I've made decks for small, high-growth opportunities where the entire argument is basically numbers 8 and 9; on the flip side, a more mature steady-growth business will be extremely sensitive to capital structure and could have an entire section just on debt covenants.

"Son, life is hard. But it's harder if you're stupid." - my dad
 

Disagree with this. This is overkill and looks like someone junior trying way too hard.

--

"He wants a slide deck with research about the company"

-- You will want to explain the following: - what the company does / how does it make money - what is its business model - basic overview info (where are its ops / revenue / assets based, who is the management team, etc.)

  • industry overview
  • industry growth profile
  • what is industry / who are key players
  • who are key customers etc
  • what are industry trends
  • barriers to entry
  • threats to industry
  • how does company compare to other players in the industry (regionally if co is specific to single region, and overall)
  • how is it performing relative to the industry
  • comps (if available)

  • customer list if available

  • who are the customers
  • what do they use the service / product for
  • how long have they been customers, etc.

etc...

-- Less deal-focused research and more on the company. The deal stuff can come if the company is interesting.

 

Exactly, in this specific case the deck shall be focused on the company. What I've written is 'relevant information to allow the decision makers to understand about the company, how it makes money, how it competes with/differentiates from the peers, how stands in the market and so on.' The list is a good starting which covers nearly all the areas. Dependending on the situation, you can skip some parts. I don't know where you got I suggested to talk about the deal...

 

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