Leveraged buyout of Verallia S.A.: valuation-detailed analysis of applied valuation approaches

Abstract

This work project discusses the hypothetical acquisition of Verallia S.A., a leading French container glass manufacturer. A leveraged buyout financial model was used to project Verallia’s performance in the next 5-7 years in an investment case, bank case, and pessimistic case. This includes various operational improvements, the required capital structure to finance the acquisition, and an add-on acquisition. Using inputs about the company’s market, competitors, and strategic development during the assumed 5-year holding period, an internal rate of return of 23.6% and a money-on-money multiple of 2.9x was achieved for the PE sponsor, demonstrating the soundness of the investment.