Overview:

You are an M&A expert at a very large private equity firm. After a recent board meeting your firm has decided to balance out its portfolio by purchasing a publicly traded automotive company and take it private. After looking at a list of 30 global car companies, the Board has decided to attempt a leverage buyout of one of the 12 car companies in the table below. You are the head analyst and asked to make a recommendation to the Board. You are recommending what company to pursue, what it is worth and what do you think a fair price would be to its existing shareholders to take it over and become part of your firms portfolio.

The Board is very sophisticated and expects a very thorough analysis but wants it delivered in a well written, professional 4-page investment memo (and accompanied with detailed excel spreadsheet of your analysis as supporting documentation).

Keep These Principles in Mind When Doing Your Work and Writing your Memo

The Board would like for you to use some form of Market Comparable Analysis (using Yahoo.finance, Morningstar.com or some other similar online site) across the 12 car companies below to first determine what appears to be a fairly-priced company. This company becomes your target company.

Then, by conducting very detailed analysis try to determine what the target company is worth today, what price seems fair to take control (control premium of the company), how best to structure the deal (debt, equity, etc.).

The Board is financially very sophisticated and would like you to base your analysis on DCF, WACC, Comparables Analysis, Two Step, APV, etc. and/or any other methods that you deem appropriate. Justify the methods you used in your memo and compare the outcomes of multiple methods in your analysis.

As this will be a somewhat hostile takeover all your analysis must be based on public information and where you make assumptions please state them in your memo and catalog them in your excel files.

You are a value investor and your firm believes that even struggling companies can be a good value if priced correctly. Similarly, you have already rejected Tesla because the stock price and market value appears very over inflated. There is not just one correct company to pick, what is more important is how you pick your target and how you analyze it and the valuation outcomes.

Assume that your firm can afford any of the companies on the short list below so to them, size of the company is irrelevant. It is all about valuation, returns and relative value.

The Board trusts the publicly audited financial statements (Income Statement, Cash Flow Statement, Balance Sheet) of the company and wants you to use them as a starting point. The Board does want you to forecast out for 10 years in your projections and calculations and is comfortable about you making informed assumptions (but please just document them). The Board would like to see 10 year forward financial plans.

The Board would also like a recommendation of how you would structure the financial structure of the company (debt, equity, etc.). What premium do you think is necessary to stockholders to tender their shares and what to do with any debt remaining on the balance sheet.

Please Help attach the excel file or format.

company	country	sales	profits	assets	market value
Daimler	Germany	$169.5B	$9.4B	$256.3B	$76.1B
Ford Motor	USA	$151.8B	$4.6B	$238B	$44.7B
General Motor	USA	$166.4B	$9.4B	$221.7B	$50.8B
Honda	Japan	$127.9B	$3.9B	$161.8B	$51.4B
Hyundai	South Korea	$80.7B	$4.7B	$148.1B	$34.2B
Isuzu	Japan	$17.4B	$957m	$15.1B	$10.8B
Kia	South korea	$45.4B	$2.4B	$42.1B	$12.6B
Nissan	Japan	$105.9B	$4.5B	$157.3B	$38.4B
Subaru	Japan	$29.8B	$2.8B	$22.7B	$273.3B
Suzuki	Japan	$28.3B	$1.4B	$25.9B	$19.9B
Toyota	Japan	$249.9B	$17.1B	$412.5B	$171.9B
Volkswagen	Germany	$240.3B	$5.7B	$458.7B	$72.9B