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Case Studies by Vikas A. Aggarwal

6 case studies

by Publication Date
published: 31 May 2019

  • Topic: Entrepreneurship
  • Region: Middle-East

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Abstract:
In 2018, the Luxury Closest (TLC), an e-commerce marketplace for pre-owned luxury goods based in Dubai, receives Series C investment from two venture capital firms, Middle East Venture Partners and Wamda Capital. CEO Kunal Kapoor needs to evaluate three distinct paths for the company’s expansion over the coming 18 months. The case follows the development of TLC since its founding in 2012, the role of venture capitalists in its growth, and the choices facing the company as it considers how to deploy the funding to expand globally.

Pedagogical Objectives:
Understand (a) the differing perspectives of entrepreneurs and venture capitalists in an early-stage VC investment; (b) how entrepreneurs and venture capitalists co-create an e-commerce start-up venture; and (c) the differences between venture capital in an emerging market like the Middle East and established locations such as Silicon Valley.

Keywords:
Entrepreneurship, Venture Capital, Private Equity, Luxury Goods, E-Commerce, Digital Disruption, Middle East, Start-Up, Scaling, Marketplace, Global Expansion

published: 28 Aug 2017

  • Topic: Entrepreneurship
  • Industry: Private Equity
  • Region: Europe

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Abstract:
In May 2012, private equity firm KKR is considering the buyout of WMF group (WMF), a diversified kitchenware and professional coffee machine manufacturer headquartered in Geislingen, Germany. The deal seems a potentially compelling investment opportunity, with various options for value creation – expanding WMF’s well-established brand to other geographies as well as reducing costs. Priorities must be set, however, to generate an attractive return by the end of the investment period. The deal team has to decide which business segments are worth putting more resources into and which to divest, which brands should be kept and which to trim off, and how to take up any operational slack without affecting the overall strategy.

Pedagogical Objectives:
This case emphasizes private equity firms’ focus on operational value creation in a large buyout, in particular the process of analysing the potential for returns by improving operations in the target company. This differs from classic studies on takeovers based purely on financial metrics. Presenting a concrete example of the potential for PE to improve the competitive positioning, operations and culture of a portfolio company, the case provides an inside view of the way deal teams evaluate potential acquisitions. It also shows the challenges posed by the target company’s capital structure that must be addressed, and how this affects the potential for value creation.

Keywords:
Private Equity, Buyout, Lbo, Operational Value Creation, Retail, E-Commerce, Growth Strategy, Europe, Germany

published: 11 Jun 2015

  • Topic: Entrepreneurship
  • Industry: Private Equity and Venture Capital
  • Region: Europe

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Abstract:
This case examines a critical decision faced by the partners of a venture capital firm, Adara Venture Partners, in June 2013. In the course of raising their second fund, the partners face the prospect of an anchor investor pulling out because Adara had not yet assembled sufficient capital to meet the end-of-month deadline to complete the fund’s first closing. As a consequence, the partners are evaluating the possibility of the GP itself underwriting a portion of the gap in the fund’s total capital commitment—which involves weighing a host of critical issues at the heart of venture capital fund management: GP economics, fundraising strategy, investor relations and the fund’s investment strategy.

Pedagogical Objectives:
An overarching objective is for participants to understand the entrepreneurial challenge of building a venture capital firm from the ground up. The specific decision addressed in the case—whether or not the partners should proceed with underwriting a portion of the firm’s second fund—allows participants to explore a host of issues that relate to the management of a venture capital fund.

Keywords:
Venture Capital, Private Equity, Entrepreneurship, Spain, Start-Ups, Financing, Europe, Technology, Corporate Governance, Value Creation, Strategy and Implementation, Gpei, Gpei-Case

published: 27 Mar 2012

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Abstract:
A consortium of private equity firms (KKR and Silver Lake Partners) is in the process of acquiring the semi-conductor division of Agilent. To prepare for the signing of the acquisition agreement and the subsequent transfer of ownership, the deal team is revisiting their investment thesis with respect to upsides and risks.

Pedagogical Objectives:
To develop a high-level understanding of the workings of leveraged buy-outs. To discuss the risk- return relationship in PE and the interplay of financial and operational risks in the deal structuring process. To understand the trade-offs involved in different debt instruments and financing structures.

Keywords:
Private Equity, Buy-Out, Kkr, Silver Lake Partners, Semiconductors, Financing, Risk, Avago Technologies, Corporate Governance, Auditing, Risk Control and Performance, Gpei, Gpei-Case

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published: 27 Feb 2012

  • Topic: Entrepreneurship
  • Industry: Private Equity
  • Region: Middle-East

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Abstract:
In 2009, Siraj Capital is deciding whether to invest in Tower United Contracting Company, a telecom infrastructure provider based in the Kingdom of Saudi Arabia. The protagonist needs to evaluate the risks associated with the investment, as well as the value that Siraj Capital brings to the deal.

Pedagogical Objectives:
To introduce students to the particular challenges associated with investing in the context of the Middle East. The case can be used in courses on venture capital and private equity, in particular sessions focused on emerging market investments.

Keywords:
Adec, Private Equity, Middle East, Smes, Entrepreneurship, Corporate Governance, Investors, Stakeholders and Accountability, Gpei, Gpei-Case

published: 31 Jan 2012

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Abstract:
A consortium of private equity firms (KKR and Silver Lake Partners) is in the process of acquiring the semi-conductor division of Agilent. To prepare for the signing of the acquisition agreement and the subsequent transfer of ownership, the deal team is revisiting their investment thesis with respect to upsides and risks.

Pedagogical Objectives:
To explore the complexities of a typical buy-out situation from the operational side. Specifically, what are the highest impact value creation levers and biggest risks, and how to mitigate them. To discuss why Agilent wanted to sell the business and why PE firms might be a better owner at the time of the transaction.

Keywords:
Private Equity, Buyout, Kkr, Silver Lake Partners, Semiconductors, Due Diligence, Risk, Avago Technologies, Corporate Governance, Auditing, Risk Control and Performance, Gpei, Gpei-Case

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