Palamon Capital Partners/ TeamSystem S.p.A.
Answer the following:
1- What is private equity investing? Who participates in it and why?
2- How is Palamon positioned in the industry? How does private equity investing compare with public market investing? What are the similarities and differences between the two?
3- Why is Palamon interested in TeamSystem? Does it fit with Palamon’s investment strategy?
4- How much is 51% of TeamSystem’s common equity worth? Use both a discounted cash flow and a multiple-based valuation to justify your recommendation.
5- What complexities do cross-border deals introduce? What are the specific risks of this deal?
6- What should Louis Elson recommend to his partners? Is it a go or not? If it is a go, what nonprice terms are important? If it’s not a go, what counterproposal would you make? to his partners? Is it a go or not? If it is a go, what nonprice terms are important? If it’s not a go, what counterproposal would you make?
Give pros and cons of both company prospects. Also, assume 14% discount rate. Also, use either “Discounted Cash Flow Analysis” or “Market Multiple”.