AcquisitionEngineering Consulting Software Solution

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ABOUT THE CLIENT

Our client is an NSE listed group company headquartered in France and is in the business of
Provider of engineering consulting and training services

 

CLIENT BRIEF

To identify and help acquire a company in the IT Services business that will accelerate its expansion of operations and at the same time be able to increase its existing bandwidth by acquiring talent pool on new-age Technologies, both in India to Overseas markets.

 

SOLUTION OFFERED

Acquisition
We were able to identify a Chennai-based 70-member services company, in the business of development of web-based and mobile applications. They were also an IT Services, horizontal and were catering to the B2B, Services market.

 

OUTCOME OF CASE 03/21

Acquired at a Deal Value: INR 10 Crores. ExcludingStock Options for the teams.

 

OUR APPROACH
  • Understand the Acquirer’s interest and focus
  • Evaluate the acquisition target on Product, Team and Business
  • Work on a valuation method that suits both the Acquirer and the Startup

 

FREQUENTLY USED VALUATION METHODS
  • Market Multiplier on Sales or EBITDA
  • Cost-to-Duplicate for early-stage Startups (pre-revenue and 1-2 into revenue generation)
  • NPV/DCF for healthy (with sound EBIT) Services companies
  • Hybrid method

 

Case Number:
3/21
Date:
17 June 2021
Author:
Sunita Kumari
Services:
Web-based IT Services horizontal
Founded In:
2018
Sold In:
2021
Funds Raised:
Bootstrapped
Revenue:
INR 3,00,00,000
Asset Acquisition:
Business + Team (Complete Acquisition)
Valuation:
NPV - DCF with 5 yrs. of Projections underconsideration
Methodology:
DCF on 5 yrs. Based on current andforecasted boom in IT/ITES Servicesmarket
Special Conditions:
30-40% hike for tech team For the founder: 40% hike + Heavy Bonus +Stocks
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