Axtria Case Study

SUBMITTED BY: Shubham Sumbey

Axtria – Pre Placement Process
YourCompany Inc – Future Road Map
Post Funding Valuation

Current Scenario: Scenario if the sales of the company are doubled:

A. Growth Rate A. Growth Rate

• Projected growth rate of BU1 sales – 88% p.a. • Projected growth rate of BU1 sales – 88% p.a.
• Projected growth rate of BU2 sales – 26% p.a. • Projected growth rate of BU2 sales – 26% p.a.
• Projected growth rate of BU3 sales – 34% p.a. • Projected growth rate of BU3 sales – 34% p.a.

B. Assumed discount rate for base case valuation – 15% B. Assumed discount rate for base case valuation – 15%

C. Assumed terminal growth rate – 7% C. Assumed terminal growth rate – 7%

D. Assumed depreciation – 10% of Capex D. Assumed depreciation – 10% of Capex

E. Projected value of the company – $ 590mn E. Projected value of the company – $ 1615mn

• As we can notice, the valuation of the company increases by 2.73 times if the sales are doubled in a years time.
This would mean a return of 173% for the investors in the immediate time frame.
• We project that the company will be profitable on operating basis in an years time.
Pre
PostFunding
FundingValuation
Valuation
Company Data FY 2015 FY 2016 FY 2017 Est FY 2018 Forecast

YourCompany Sales ($m) 25 45 60 90 131 198 309 499 831

Sales Split 1 2 3 4 5

BU 1 2 9 17 25 47 88 166 313 587.594233 Sensitivity Analysis

BU 2 12 15 20 30 38 47 60 75 94

BU 3 11 21 23 35 46.75 62.43 83.38 111.36 148.73 590 13% 14% 15% 16% 17%

Sales in US 25 40 50 60 104.583 157.702 245.974 396.823 660.734 5% 645 549 472 411 360
Global Sales - 5 10 30 27 41 63 102 170
6% 737 617 525 452 393
Cost 30 51 50 60
7% 860 705 590 502 432
Capex($m) 15 30 30 25 25 25 25 25 25

People($m) 8 12 15 25 25 25 25 25 25
8% 1,032 823 675 565 481
Project Margin(%) 35% 25% 40% 50% 50% 50% 50% 50% 50%
Gross Margin(%) 5% 7% 15% 22% 22% 22% 22% 22% 22% 9% 1,290 987 787 646 541

Gross Profits 29 44 68 110 183

NOPAT 23 34 53 86 143

FCF (25) (13) 6 38 95

Terminal Value 1,271

Discounted FCF (22) (10) 4 22 47

Discounted TV 550

Enterprise Value 590

Post Funding Valuation
Company Data FY 2015 FY 2016 FY 2017 Est FY 2018 Forecast

YourCompany Sales ($m) 25 45 60 90 263 397 618 998 1,661

Sales Split 1 2 3 4 5

BU 1 2 9 17 25 94 177 332 625 1175.18847 Sensitivity Analysis

BU 2 12 15 20 30 75 95 119 150 189

BU 3 11 21 23 35 93.49 124.86 166.76 222.73 297.47

Sales in US 25 40 50 60 209.166 315.405 491.948 793.647 1,321.467 1,614 13% 14% 15% 16% 17%

Global Sales - 5 10 30 54 81 127 204 340 5% 1,757 1,513 1,319 1,163 1,034

Cost 30 51 50 60 6% 1,987 1,684 1,451 1,266 1,116

Capex($m) 15 30 30 25 25 25 25 25 25
7% 2,294 1,904 1,615 1,392 1,215
People($m) 8 12 15 25 25 25 25 25 25
Project Margin(%) 35% 25% 40% 50% 50% 50% 50% 50% 50% 8% 2,724 2,198 1,826 1,549 1,335
Gross Margin(%) 5% 7% 15% 22% 22% 22% 22% 22% 22%
9% 3,369 2,609 2,107 1,751 1,486
Gross Profits 58 87 136 220 365

NOPAT 45 68 106 171 285

FCF (2) 21 59 124 238

Terminal Value 3,178

Discounted FCF (2) 16 39 71 118

Discounted TV 1,374

Enterprise Value 1,615

THANK YOU