Case Study
Identification of potentially distressed firms for a restructuring team
About the Client
- An advisory firm in Europe; one of its arms specialises in selling corporate restructuring services
- Sector Focus: Healthcare, Industrials and TMT
Business Need
- Increase sales by proactively identifying firms that may require restructuring / turnaround advisory services in the short term
- Sector: Healthcare
- Firm type: Public
- Geographic focus: US, Canada and Europe
Approach and Methodology
- Leveraging databases such as Bloomberg, extracted the list of companies in the target sector, along with the companies’ financial details
- Analysed shortlisted companies on 17 financial parameters such as EBIT margin, EBITDA/CFO, stock price/CFO, interest coverage ratio, ROE, total debt/equity, quick ratio, cash conversion cycle, total debt/(EBITDA – CAPEX), total debt/total assets, CFO/current liabilities, etc.
- Compared the performance of the target company with its peers
- Filtered companies based on the aggregate number of distressed areas
- Triangulated financial analysis with qualitative news triggers (lay-offs, liquidity crunch, debt restructuring, etc.) for forward looking analysis
- Created investment thesis on prioritised targets for client’s internal evaluation
- Provided on-going quarterly updates to the client
Business Outcomes
- 25% increase in sales conversion
- Assistance in creating sales pipeline to the tune of €200mn+
- 1000+ person hours saved in target identification
