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Private Equity Case Study 2
Private Equity Case Study 2
Bain capital
and
Dollorama
Introduced by : Ilik LIU, Amine BEKKAL, Alice ROSSI, Manar EL KABANI & Amélie PRONO
Summary
01 Context of
investment 02 Fundamentals of
performance
Canadian retail industry is an attractive arena only for US based private equity
investors because of the fast growing sector
Context of investment
Dollarama has 350 stores concentrated in
Quebec and is historically one of the fastest 01
growing dollar store chain in Canada
- The main strategy of the company was to identify a suitable target that allow growth for the private equity fund
- To change the portfolio of companies to drive growth from the business
- Bain Capital avoided the hostile transactions or takeovers
- Bain Capital has always focused on working along with the management of the companies either through the
restructuring or expansion programs
- Strategic and oriented consensus at each step of the deal process where the management of the respective company
played an important part
Valuation
Market Capitalization/Equity Net Debt EBITDA 2005 EV/EBITDA
Standard 304,7 31,5 109,7
Shoppers Drug Mart Corp. 7587,9 741,8 636,3 13,1
Sears Canada Inc.3 1917,1 1954,9 413,6 9,4
Forzani Group 361,9 114,5 76,5 6,2
Loblaw Companies Limited 18380,8 4498 2125 10,8
Canadian Tire 5684 1086,3 695 9,7
Average multiple 9,84
Entreprise Value 1079,9
Equity Value 1048,4
The Gearing ratio fell from an initial 1,25 during the LBO setting to a
0,18 at Exit.
Team
3% 21,8%
2.5% 21,1%
4,50% 4% 3,49% 3% 2.5%