Palamon Capital Partners/Teamsystem S.P.A

20 Pages Posted: 21 Oct 2008

See all articles by Robert F. Bruner

Robert F. Bruner

University of Virginia - Darden School of Business

Chad Rynbrandt

affiliation not provided to SSRN

Sean Carr

University of Virginia - Darden School of Business

Multiple version iconThere are 2 versions of this paper

Abstract

In February 2000, a managing partner of a UK-based private equity fund, Palamon Capital Partners, faced the decision of whether to invest in an Italian software company, TeamSystem, S.p.A. The rationale for this investment was a belief in the rapid future consolidation of the enterprise software industry in Italy, in combination with improvements in operating performance believed to arise from a stronger investor orientation after the transaction. The transaction entailed a leveraged recapitalization of the target that would significantly change its ownership, control and leverage. The task for the student is to evaluate the attractiveness of the investment, based on a strategic appraisal, a valuation of the target with its new capitalization, and an assessment of the proposed deal structure.

Excerpt

UVA-F-1331

Rev. Feb. 12, 2014

PALAMON CAPITAL PARTNERS/TEAMSYSTEM S.P.A.

We want to make money by investing in change.

—Louis Elson, Managing Partner, Palamon

In February 2000, Louis Elson looked over the London skyline and reflected on the international private equity industry and the investment processes that would be necessary for success in this increasingly competitive field. Elson, a managing partner of the UK-based private equity firm Palamon Capital Partners, was specifically considering an investment in TeamSystem S.p.A., an Italian software company. Palamon was interested in TeamSystem for the growth opportunity that it represented in a fast-changing market. Palamon had an opportunity to purchase a 51% stake in TeamSystem for (euros) EUR25.9 million. In preparing a recommendation to his colleagues at Palamon, Elson planned to assess TeamSystem's strategy, value the firm, identify important risks, evaluate proposed terms of the investment, and consider alternative exit strategies.

. . .

Keywords: private equity, valuation, discounted cash flow, multiples, leverage

Suggested Citation

Bruner, Robert F. and Rynbrandt, Chad and Carr, Sean, Palamon Capital Partners/Teamsystem S.P.A. Darden Case No. UVA-F-1331, Available at SSRN: https://ssrn.com/abstract=1279298

Robert F. Bruner (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-3823 (Phone)
434-924-0714 (Fax)

HOME PAGE: http://faculty.darden.edu/brunerb/

Chad Rynbrandt

affiliation not provided to SSRN

No Address Available

Sean Carr

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4812 (Phone)

HOME PAGE: http://www.batteninstitute.org

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