Summit Partners Fleetcor a

1716 words 7 pages
Private Equity and Investment Banking
SPRING 2010

Summit Partners FleetCor A

1. Summarize the proposed transaction: Summit Partners proposes to FleetCor Technologies (later preferred as “FleetCor” or the “Company”) an investment into FleetCor for the total amount of $44.9 million in return for a post transaction ownership of 54.2% in the “Company” and coming down to 46% ownership in the company after newly created stock options for management equivalent to 15% ownership in the company has been completely executed and fully diluted. This investment is in the form of convertible preferred stock with an 8% accrued interest, compounding annually. As the transaction come through, Summit’s prefer stock will be treated equal-footing in
…show more content…
Licensee in Chicago will yield a loss of EBITDA and the one in Tampa yield only $83,000 of EBITDA which is very small compare to the cost of acquiring this licensee.

5.Look at the Transaction Multiples Analysis in Exhibit 5d and 6. Analyze the comparables (Exhibit 6): a. Would you recommend using all the comparables listed? Would you exclude any of the comparables? Explain your answers. I would not recommend using all the comparables listed. I would exclude all of the comparables from group of credit card issuers because FleetCor has been operating its business as a merchant card processor which is different from the credit card industry. Basic principle for valuation using industry comparables is that we have to use comparables for the group of companies in the same industry with the valued company. I might want to keep the comparables for the group of other transaction processors.

Through my observation, I find that Ceridian which is in the same industry with FleetCor has the most similar Enterprise Value/Revenue Ratio and Enterprise Value/EBITDA with the company (leading to that Ceridian would be a good indicator for valuation of FleetCor

b. Based on the comparables how would you value the proposed acquisitions of the licensees? What do you think of the multiples proposed

Related

  • Starbucks Sustainability Report
    4173 words | 17 pages
  • Partners Healthcare Case Aanlysis
    1252 words | 6 pages
  • Cat - Make Dealer Your Partners
    8008 words | 33 pages
  • Frank Davis Comes Madagascar
    2450 words | 10 pages
  • Euro Zone Crisis
    4171 words | 17 pages
  • Arundel Partners
    1812 words | 8 pages
  • INTO THIN AIR copy
    2572 words | 11 pages
  • Mcdonald's Corporation Case Analysis
    845 words | 4 pages
  • Vallaha Partners
    854 words | 4 pages
  • Agency Relationship Between Partners in a Partnership
    1094 words | 5 pages