The IB League Case Study
The IB League Case Study
FY2015
23,702
Insurance
8,125
9,578
Emerging Industries
16,398
Others
145
Total
57,948
Divisional overview :
Banking and Capital Markets:
Mphasis combines its expertise in the banking industry with latest technology and state of the art
methodology to offer the most innovative solutions in areas like multi-channel delivery, mobile
technologies, business analytics and business process improvement, among others.
The companys integrated applications, business processes and infrastructure solutions and
services are designed to help clients meet their most challenging business and technology
needs. Mphasis provides insights in banking and exhaustive domain experience to help clients in
accelerating growth strategies, business models and results.
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Insurance:
Mphasis caters to the broad insurance industry including life & annuities, property & casualty as
well as reinsurance. It provides solutions and services that help insurers address some of the
most difficult business challenges. From distribution to underwriting, billing to claims, policy
administration to asset management, Mphasis is focused on helping insurers meet the needs of
policy holders and distribution partners.
Information Technology, Communication and Entertainment:
Mphasis industry experience and expertise in media entertainment can help transform the
companies in this segment by aligning them with emerging business models, changing consumer
behavior, evolving technologies and competition.
Mphasis services telcos across the globe in both traditional operations as well as emerging
technology areas. It optimizes traditional operations, infrastructure & business processes for
telcos and mobile virtual network operators and enabler using its solutions and services.
Emerging Industries:
Mphasis has done well to move beyond traditional business segments and has spread its wings
in emerging industries like retail, travel & transportation and manufacturing etc. Mphasis
services in retail comprise a mix of business consulting, technology consulting, architecture and
design, implementation, management, maintenance of product/enterprise applications and legacy
applications services. Mphasis has extensive experience in the travel & transportation domain
and has developed large and complex applications implementing a range of technologies for
airline operation, airport management, cargo logistics and travel agency operations.
_____________________________________________________________________________
More information: Since we know that you need to do a detailed study of the business of the
company and its valuation, we have assigned a mentor who will help you in this exercise.
Our Star Banker - Mr. DealMan, has sent an email to you, the contents of which are
reproduced on the next page - We would recommend that you take full cognizance of Mr.
DealMans advice.
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The IB League
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Email from Mr. DealMan:
Folks, in any investment banking deal, a banker is supposed to have a deep understanding of
the companies under consideration. As this is a sell side deal, I would recommend that you start
with knowing this companys business in detail and how it is performing in the IT industry with
relation to its peers. A good starting point for you would be the companys fillings on its website:
http://www.mphasis.com/financial-results.html
Needless to say, once you have studied the company under consideration in detail, you should
look for more information from its peer set, looking at their annual reports and company
presentations.
Once you have analysed the companies, please also go through sector reports. This will give you
enough knowledge on how the sector is progressing, what are the opportunities and challenges
in the sector, etc. You can start by going through some of the reports on NASSCOM and its blog.
http://www.nasscom.in/research-reports
Once you have completed gathering information from the knowledge centers mentioned above,
please also look for broker reports on the relevant company/industry. Here are some links where
you can directly access the reports (in some instances you may have to create an id to access
the reports) :
http://www.researchbytes.com/Mphasis-Limited-M0399.htm
http://www.motilaloswal.com/Financial-Services/Research/Search/Mphasis-COM/526299
http://www.moneycontrol.com/news/Mphasis/brokerage-reports-MB02-6months-5.html
To do a proper valuation for a sell side deal, you should also know at what valuation other peers
in the same universe are trading and what were the premiums or discounts paid for similar
transactions previously. I have selected a set of companies and transactions as a starting point
for you. But as I am hard pressed for time, I cannot compile a final set of companies and
transactions that should be taken for this exercise. I would suggest that you select relevant
companies/transactions from the list and complete your desired analysis.
Hope you make good use of all the suggestions above. Please keep in mind that these are only
guidelines and you should not limit your work to the mentioned suggestions / links.
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The IB League
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Trading multiples1
Market Cap
(USDm)
EV
(USDm)
66,169
Atos
CGI
EV/ Sales
EV/ EBITDA
EV/ EBIT
P/E ratio
2015e
2016e
2015e
2016e
2015e
2016e
2015e
2016e
Long-term
Growth rate
62,723
2.0x
1.9x
12.1x
11.4x
13.8x
12.8x
19.9x
18.1x
8.90%
7,630
6,674
0.6x
0.5x
5.2x
4.7x
7.7x
6.8x
12.6x
11.2x
15.50%
12,344
13,618
1.7x
1.6x
9.1x
8.7x
11.8x
11.2x
15.1x
14.0x
9.70%
936
885
2.1x
1.8x
13.2x
11.9x
n/a
n/a
18.4x
16.1x
n/a
36,239
33,964
2.8x
2.4x
14.0x
12.2x
15.7x
13.4x
19.9x
17.2x
16.90%
9,508
10,107
0.9x
0.9x
4.8x
4.7x
9.0x
8.5x
13.5x
12.5x
9.90%
Cyient
975
888
1.7x
1.5x
11.5x
9.5x
13.7x
11.1x
16.3x
14.0x
21.00%
eClerx
727
652
3.6x
3.1x
11.0x
9.3x
13.1x
11.2x
17.0x
14.8x
17.20%
1,197
1,109
1.8x
1.6x
11.5x
9.8x
16.7x
13.7x
18.5x
16.0x
14.30%
242,903
230,874
13.6x
10.2x
22.1x
16.6x
26.0x
19.3x
42.6x
32.3x
35.80%
348
490
1.0x
0.9x
7.3x
6.4x
8.5x
7.5x
7.7x
6.4x
n/a
11,241
14,249
0.4x
0.4x
5.1x
4.7x
10.3x
8.8x
11.5x
10.3x
10.00%
4,774
5,102
2.1x
1.9x
12.5x
11.1x
15.6x
13.8x
18.6x
16.1x
12.50%
373,501
312,475
5.2x
4.5x
10.8x
9.2x
13.1x
11.2x
19.2x
16.7x
14.90%
HCL Tech
20,449
19,040
3.1x
2.7x
13.0x
11.6x
13.7x
12.2x
16.9x
15.1x
15.00%
Hexaware
1,197
1,122
2.4x
2.1x
12.8x
11.1x
14.0x
12.0x
18.6x
16.0x
16.40%
HP
55,906
62,597
0.6x
0.6x
5.0x
5.0x
6.8x
6.7x
8.3x
7.9x
4.20%
IBM
161,904
192,075
2.3x
2.3x
8.4x
8.3x
10.1x
10.1x
10.3x
10.0x
6.40%
33,764
28,576
3.2x
2.8x
11.5x
10.2x
12.4x
11.1x
16.6x
15.0x
12.20%
1,313
1,178
10.3x
7.8x
39.2x
25.9x
44.7x
28.8x
56.4x
37.2x
42.80%
294
292
0.6x
0.5x
5.3x
4.4x
6.9x
5.4x
8.4x
7.2x
(4.80%)
364,405
300,835
3.2x
3.0x
9.0x
8.2x
10.7x
9.6x
16.7x
14.6x
10.70%
Mindtree
1,599
1,453
2.3x
2.0x
11.7x
10.0x
13.7x
11.7x
17.5x
15.1x
16.20%
Mphasis
1,311
997
1.2x
1.0x
7.5x
6.3x
8.2x
7.0x
12.5x
10.6x
12.00%
NIIT Tech
368
318
0.8x
0.7x
5.2x
4.5x
7.1x
6.1x
11.8x
9.3x
n/a
NTT Data
11,918
14,528
1.1x
1.1x
6.8x
6.5x
17.9x
16.0x
28.6x
23.4x
9.30%
179,084
167,109
4.3x
4.2x
9.2x
9.2x
9.7x
9.6x
14.5x
13.9x
6.90%
Persistent
779
684
2.1x
1.8x
9.9x
8.4x
12.6x
10.4x
16.3x
14.1x
n/a
Polaris
260
228
0.7x
0.7x
6.1x
5.1x
7.2x
6.1x
9.1x
7.6x
14.70%
83,568
90,028
4.0x
3.8x
11.9x
11.1x
12.8x
12.1x
17.0x
15.7x
9.10%
3,686
2,955
3.0x
2.7x
10.4x
9.2x
11.1x
9.7x
16.0x
14.1x
15.00%
77,803
74,643
4.5x
4.0x
16.0x
13.9x
16.9x
14.7x
21.5x
18.7x
16.50%
7,345
6,889
1.7x
1.5x
10.0x
8.5x
11.7x
9.9x
15.5x
12.9x
17.40%
22,263
20,306
9.2x
6.2x
37.9x
22.2x
70.5x
37.0x
105.0x
53.9x
66.30%
Wipro
21,129
18,324
2.3x
2.1x
10.4x
9.5x
11.8x
10.7x
14.8x
13.5x
11.10%
WNS
1,396
1,232
2.3x
2.1x
10.9x
10.1x
17.7x
15.0x
15.6x
14.4x
15.70%
Xerox
11,570
18,683
1.0x
1.0x
7.1x
6.8x
11.5x
10.2x
10.5x
9.6x
5.20%
Company
Accenture
CMC
Cognizant
CSC
EXL
Facebook
Firstsource
Fujitsu
Genpact
Google
Infosys
Just Dial
KPIT Tech
Microsoft
Oracle
SAP SE
Syntel
TCS
Tech
Mahindra
Note:
1.
Valuation multiples calendarized to December year end
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Precedent transactions
Announcement
Date
Deal Value
(USDm)
EV
(USDm)
EV/
EBITDA
EV/
Sales
Target
Acquiror
17-Jun-15
Anite plc
605.67
559.16
27.75x
3.23x
15-Jun-15
4,460.21
4,460.21
38.73x
4.70x
12-May-15
AOL Inc
4,285.60
4,267.90
13.83x
1.66x
7-May-15
Equinix Inc
4,021.73
4,021.73
16.15x
7.58x
27-Apr-15
iGate Corp
Cap Gemini SA
4,447.67
4,447.67
17.54x
3.45x
15-Apr-15
1,267.32
2,481.02
235.12x
187.51x
12-Feb-15
Expedia Inc
1,582.43
1,582.43
12.32x
1.74x
8-Dec-14
EVRY ASA
1,024.16
1,024.16
6.22x
0.56x
25-Nov-14
1,194.04
1,194.04
17.63x
3.59x
16-Oct-14
CMC Ltd
514.31
1,011.79
15.65x
2.60x
13-Jun-14
OpenTable Inc
2,613.44
2,495.84
53.62x
12.58x
26-May-14
Kakao Inc
6,985.22
6,859.89
111.23x
33.36x
22-Jul-13
Yahoo! Inc
1,164.40
28,967.10
36.46x
6.01x
8-Nov-12
Priceline.com Inc
2,041.93
1,976.47
37.58x
7.45x
29-Jun-12
3i Infotech Ltd
Various investors
408.54
483.91
12.53x
1.64x
31-May-12
974.09
6,453.35
8.40x
1.57x
8.79x
22-May-12
Ariba Inc
4,608.70
4,412.30
152.65x
21-Mar-12
1,561.33
2,273.28
16.31x
2.06x
21-Feb-12
Alibaba.com Ltd
2,483.75
7,489.72
26.14x
7.40x
4-Aug-11
Emdeon Inc
Blackstone Group LP
3,096.25
3,096.25
12.23x
2.88x
1-Jun-11
Telvent GIT SA
Schneider Electric SA
1,939.62
1,982.55
12.13x
1.89x
27-Apr-11
SAVVIS Inc
CenturyLink Inc
3,093.02
3,093.02
14.90x
3.32x
1-Apr-11
1,864.93
1,804.32
12.02x
1.06x
15-Nov-10
EMC Corp
2,584.13
2,470.32
410.35x
45.88x
26-Sep-10
Visma AS
1,437.14
1,820.75
15.66x
3.17x
18-Aug-10
McAfee Inc
Intel Corp
7,666.87
6,878.48
17.24x
3.43x
15-Jul-10
3,102.59
2,930.59
15.42x
0.75x
10-May-10
Apax Partners LP
4-May-10
5-Nov-09
28-Sep-09
962.27
962.27
18.12x
1.92x
3,351.96
3,045.94
11.28x
4.02x
5,203.35
5,203.35
12.45x
2.40x
Xerox Corp
8,414.76
8,414.76
7.57x
1.29x
3,884.50
3,734.50
12.33x
1.41x
816.49
769.64
12.06x
2.03x
1,059.84
1,059.84
21.87x
2.62x
21-Sep-09
Dell Inc
26-Sep-08
28-Jul-08
13-May-08
Hewlett-Packard Co
13,304.00
13,304.00
10.13x
0.60x
12-May-08
Finmeccanica SpA
5,601.97
5,601.97
25.67x
2.42x
6-Aug-07
Infocrossing Inc
Wipro Ltd
556.23
556.23
20.69x
2.39x
2-Aug-07
CheckFree Corp
Fiserv Inc
4,313.18
4,027.14
20.97x
4.37x
30-May-07
Ceridian Corp
5,190.18
4,904.98
14.56x
3.09x
18-May-07
aQuantive Inc
Microsoft Corp
5,923.09
5,630.21
283.01x
25-Apr-07
Covansys Corp
1,281.60
1,159.32
24.00x
2.55x
12-Mar-07
FastWeb SpA
Swisscom AG
5,373.72
6,319.70
11.49x
3.67x
26-Oct-06
Cap Gemini SA
1,175.25
1,100.82
26.63x
4.78x
25-Sep-06
Emdeon Corp
Emdeon Corp
1,550.00
4,822.51
34.43x
3.78x
19-Sep-06
Motorola Inc
3,900.00
3,863.23
72.19x
2.19x
25-Jul-06
Hewlett-Packard Co
4,686.20
4,686.20
37.03x
6.83x
17-Apr-06
900
1,004.17
29.11x
9.22x
3-Apr-06
381.04
731.35
21.16x
3.47x
10-Jan-06
De Agostini SpA
4,561.21
4,561.21
9.17x
3.58x
1.49x
14-Dec-05
2,156.89
2,156.89
16.52x
19-Sep-05
Unilog SA
LogicaCMG plc
1,143.14
1,027.51
12.52x
1.28x
28-Mar-05
Investor Group
11,760.48
11,760.48
11.30x
3.31x
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The IB League
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