Emerging Market Power Producer Private Placement Financial Model

Description
Polenergia S.A. Financial Model is a financial model of an Emerging Market, Polish, independent power producer private placement by a consortium of investors including Brookfield Renewable Partners LP and Equinor ASA. The company has an aggressive growth strategy in transitioning to a zero-emission energy group by 2024 and has significant reinvestment needs. Investment and equity injection by external investors and new shareholders is the viable method for realization of the growth strategy. The deal is a cash deal financed by sponsor’s equity as well as debt at the fund level, and structured as a stock sale. The model and methodology specifically focuses on value drivers and valuation of companies in Emerging Markets as oppose to the Mature Markets. The model is ideal for investment banking, equity research, power and utility, private equity, finance professionals, valuation and transaction experts. The model includes the following features:
- An intrinsic valuation of this independent power producer under the existing management team as of the deal announcement date in Polish currency, PLN.
- A relative valuation of this Polish, European power producer under the existing management team as of the deal announcement date.
- Determination of the fairness of the offer price of this deal to the shareholders and existing investors.
- Inclusion of a football chart of offer prices, other stock and index performance graphs and operating and financial charts.
- An intrinsic valuation of the revamped company under the guidance of the new board and management and private equity teams as of the deal announcement date.
- Calculation of value of control in this transaction as a result of privatization and significant reinvestment over the next four years under the new management team and the efforts for improving operating efficiency and capital structure.
- A simple method for calculation of unlevered free cash flow (“Free Cash Flow to the Firm”,”FCFF”, or “UFCF”).
- Determination of and reasoning behind valuation inputs such as reinvestment rates, return on capital and growth rates.
- Determination and definition of a market index for an Emerging Market publicly traded company for purposes of beta calculation.
- Quantification of risk measures and methodology of calculation of beta, cost of equity, cost of debt, default spreads and cost of capital throughout the forecast period in Polish currency, PLN, an emerging market currency.
- Evaluation of management team performance based on risk adjusted, market adjusted performance measure, Jensen’s Alpha.
- Integration of shareholder loan and second sponsor equity injection in the model and shareholders equity schedule.
- Internal rate of return (“IRR”) schedule and value added at the operating company (“OPCO”) and the holding company (“HOLDCO”) or Fund level given the initial investment in OPCO and HOLDCO by the sponsors as of Q4/2020, HOLDCO debt payments, calculation of paid-in-kind and cash interest expense and its treatment in HOLDCO debt schedule, and annual exit throughout 2024 to 2029.
- Leveraged buyout model along with the sources and uses of funds at OPCO and HOLDCO given the stock sale financed on balance sheet with sponsor equity and long term debt while assuming the existing long term debt on company’s balance sheet as of Q3/2020, transaction fees and purchase price allocation, and calculation of goodwill created on the pro forma balance sheet in the transaction given the deal tearsheet and financial disclosures by the company.
- Recapitalized pro forma balance sheet of the company that is taken private.
- Historical financial statements of Polenergia and the resulting credit statistics from 2014 to Q3/2020.
- Sensitivity analysis of HOLDCO IRR’s and Fund Investors’ returns with respect to the amount of leverage used in the Fund.
- An automated summary dashboard for company financial report, market data, valuation before and after the transaction, and IRR schedules for all investors.
- The tabs of the models are: Cover, Summary, Assumptions, Sources and Uses, Historicals, Valuation, IRR Model, Forward Multiples, Risk and Notes.
- A report of the transaction and the financial model describing different steps and segments of the model, the transaction terms and company valuation, internal rate of returns and sensitivities as of Jan 22, 2021 and a training video describing the model along with the print ready format of the model is included with the package.