Professional Documents
Culture Documents
opportunity/situation":
1. The Banks
What's in it for the banks?
Beside the enormous profit potential—as supported by Lanza e Compagnia’s LBO track record
—this LBO opportunity also stands a prestige-transaction. Whichever one of the 2 gets in on
this, stands to, in turn, consolidate leadership role in the world of finance. Therefore, not much of
“selling” the opportunity (as in, courting the banks) should go on necessary.
What's the banks got to offer?
Both OmniGroup and EuroBank are in a perfect position to, and have displayed interest in
backing LBO with required funding in order to win the deal. Letters of Commitment should not
be hard to obtain from either.
Loan terms and conditions will make all the difference.
2. The LBO Sponsor – The White Knight?
What’s in it for Lanza e Compagnia?
As an uncontested leader in the LBO sector, Lanza e Compagnia needs the next big deal to
remind the market of its active and dominant presence.
Experience with consumer foods LBOs favors them as a company that’s likely to succeed in
integrating HoogenFood without losing value in the process, while identifying synergies and
maximizing returns.
What's Lanza e Compagnia got to offer?
First and foremost, Lanza e Compagnia stands as the white knight in a gloomy horizon, with the
potential to snatch HoogenFood from the jaws of an unfriendly acquisition. Another appealing
aspect of theirs is the management feels safer and more confident of their career prospects, with
Lanza e Compagnia leaving company management to them and sticking with what they do best:
LBO and invest management. Third, the Lanzas are known not only for their keen eye for
spotting lucrative investment opportunities, but partially for improving operations and squeezing
efficiencies and profitability for their acquisitions.
Lanza e Compagnia almost desperately needs to make good use of their EUR6 billion fund, for
which an opportunity of the right scale and appeal isn’t readily available, beside HoogenFood.
3. Alimentos Globales – The other White Knight?
What's in it for Alimentos Globales?
Alimentos Globales’ and HoogenFood’s respective CEOs serve on each other’s board. Their
respective markets and lines of business are complementary, despite the apparent competition
between the two. In fact, the fit between these two is such that, it might raise antitrust concerns,
leading to deal block by the Competition Directorate-General of the EC.
HoogenFood finds itself in an apparently not so comfortable position, in the crossfire of Finance
Mondiale. But given the new parties at play, this may turn out to be “time to sell” that Victor
Hoogen was waiting for. As he questioned the stock market valuation of his company and
entertained talks with potential buyers over the years (including the Lanzas), Finance Mondiale’s
unfriendly bid might just be the trigger he needed to be propelled in the “right” price margin, if
only he’ll surgically orchestrate a delicate series of negotiations, favorable to upward and
competing valuations HoogenFood, through a high bidding war amongst all interested parties.
This sets the stage for a most interesting simulation. We think we can sway this our way with a promise
to stay out the way of running the business, as always. Our valuation method for the company will
depend upon a number of parameters, including current offer, HoogenFood’s own anchor price. The
only limitation we’ll set has to deal a conservative financing approach; our concern in the process being
not to over-leverage. Our strategy will ride on one of two tracks:
- Partner with Alimentos Globales, who’s on very positive terms with HoogenFood, but this comes
with a risk as we may buy Alimentos Globales a sit at the tables, only to end up competing with
them.
- Or going it alone, leaving Alimentos Globales out, without a chance for a shot at the acquisition.