Case Study
Investment opportunity identification in the European healthcare sector
About the Client
UK-based PE firm, specialising in growing and building companies with equity requirement of atleast €200 million
Business Need
-
Identify high growth companies as potential acquisition targets for investment with the following criteria:
- Sector: Healthcare
- Firm type: Private
- Target size: Revenue range: €40- 250 mn | EBIT margin: >= 8%
- Geographic focus: Target to be headquartered in Europe
- Ownership:
- Not a subsidiary of a larger player.
If a subsidiary, then not aligned with the parent company’s core business
Approach and Methodology
- Implemented our proprietary RocEyeTM GrowthTM funnel-based deal origination approach to identify hidden gems
- Identified relevant industry segments based on size, growth rate, degree of consolidation and PE buzz. For the shortlisted segment (‘Ophthalmic and Optical Technology’), we built a comprehensive list covering 1,000+ private companies leveraging databases, associations, exhibitions/conferences, news aggregators, news portals and social media
- Shortlisted 315 companies based on business relevance and financial investment criteria.
- Percentile ranked companies based on the financial KPIs and calculated weighted average scores (0-10) to measure relative attractiveness
- Screened companies based on qualitative investment triggers, such as presence in growth segments, product precommercialisation buzz, stated expansion plans, recognition, partnership and M&A, management change, etc.
- Shortlisted the top 10 percentile targets based on RocIndex score, in consultation with the client; Created a detailed target profile (investment thesis)
Business Outcomes
- 26% increase in client’s pipeline of potential targets
- 1000+ analyst hours saved in deal origination
- 32 investment gems identified from a list of 1,000+ companies
