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Case Study and Sample Slides Saudi Arabia: Football Training Program

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Disclaimer Disclaimer

THE SAMPLE CONTAINS EXCERPTS FROM A STUDY CONDUCTED BY SUTHERLAND GLOBAL SERVICES FOR ITS CLIENT. THE SAMPLE MAY NOT CONTAIN ALL THE PAGES OF THE ORIGINAL DOCUMENT THIS SAMPLE HAS BEEN PREPARED BY SUTHERLAND GLOBAL SERVICES INC. OR ITS ASSOCIATES OR AFFILIATES (“SUTHERLAND GLOBAL SERVICES”) EXCLUSIVELY AS AN ILLUSTRATIVE SAMPLE ONLY AND IS SENT TO AUTHORISED RECIPIENTS SOLELY FOR THE PURPOSE OF EVALUATING SUTHERLAND GLOBAL SERVICES’S SUPPORT SERVICE CAPABILITIES. THIS SAMPLE SHOULD NOT BE CONSIDERED AS AN OFFER TO SELL, A SOLICITATION TO BUY, OR AN ENDORSEMENT OR RECOMMENDATION OF ANY COMPANY. SUTHERLAND GLOBAL SERVICES DOES NOT GUARANTY THE ACCURACY, COMPLETENESS OR OTHER CHARACTERISTICS OF THE DATA / INFORMATION OF THE REPORT.

This Sample may not be reproduced or distributed (in whole or in part) to any third party without the express prior permission of Sutherland Global Services. Sutherland Global Services may also have (or have had) arrangements with entities whereby Sutherland Global Services receives or is in receipt of information relating to the subject matter of this Sample that is confidential or proprietary to a third party, and thus may not be utilized. Accordingly, Sutherland Global Services may be in receipt of relevant information that is not reflected in this Sample.

© 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

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Football Training Club Client • The client is a leading investor in Saudi Arabia

Client Ask • The client mandated SGS to prepare a business plan to setup a Football training club in Saudi Arabia • The key objective of the study was to research on revenues and profits projection, competitive benchmarking, positioning and promotion strategies

Sutherland’s Solution • Primary Research: We conducted extensive primary research (telephonic interviews) with key competitors of in the similar industry to benchmark the strategies and existing business plans • SGS conducted extensive secondary research to understand the sports market, football popularity and penetration, and target market opportunities; Our secondary sources included company websites, select paid databases such as OneSource and Zawya and generic Internet search

• Benefits to the Client • SGS provided an exhaustive business plan to the client which included – Competitive landscape, – Sponsorship – Infrastructure/amenities details – Capital Funding – Pricing – Cash Flows – Location options – Revenue and Profit Projections – Promotional Strategies – Sensitivity Analysis, ROI, Return Multiples

© 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

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State-of-the-art equipment & amenities and expert Brazilian trainers ensure finest training for the students

Description

Football Field

Training Kits/ Equipment

• Football field forms the most basic and the most necessary part for this program

• Training Kits will comprise of training gear, training equipments and coaching kit

• The Saudi Stars Program assumes to train 180 students per field with 6 sessions per field considering 30 students per session

• The playing fields would be taken up on a rental basis from schools, football clubs and associations

Costing

• The contracts for usage of grounds will vary from cost per student enrolled or % of fees received from kids’ enrolment, or flat rent

Office Infrastructure • The Saudi Stars Program would be headquartered in Jeddah with branch offices spread in rest of the cities through out the country • The head office would be set up in a facility of approximately 250 Sqm and branch office at 200 Sqm

• Training Gear: SAR 3900 per field • Training Equipments: SAR 900 per field • Coaching Kit: SAR 500 per field

• Head Office: Approximate rental expense of the facility would be up to SAR 1.65 million annually • Branch Office: Total rental expense would be SAR 5.28 million for the first year

Coaching Staff • The coaching staff would consist of a senior/head coach, a junior coach and a local coach. The head coach and the junior coach would be from Brazil • Each field would have a senior coach along-with either a junior or a local coach • Head Coach: SAR 28,816 per month • Junior Coach: SAR 8,133 for locals and SAR 12,571 for expatriates

Source: Sutherland Research

© 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com January 15, 2013

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Pricing remains dynamic, with early bird discounts; with ‘live’ promotions conducted at various venues Pricing •

Saudi Stars Program being a new format, the first few customers would be getting early bird discounts

The rates would be standardized after the program establishes a proper foothold over the market. Thus, a differential pricing strategy that rewards the early birds would be adopted

Student Break-up

Fee/Month

First 5000 Students

SAR 300

5000-8000 Students

SAR 400

Above 8000 Students

SAR 500

Place •

Promotion will be undertaken through road- shows, contests, games and media events, which will run in parallel to classes

These shows will be conducted by Brazilian trainers who would travel around in program’s dedicated van designed specifically for the road shows

Multiple shows (3-4) will be handled by a trainer in a day at different venues

Schools

Malls

Residential Compounds

Other Public Places

Source: Sutherland Research

© 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com January 15, 2013

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Multitude promotional strategies and sponsors’ back up ensure successful program operations Promotion • Effective promotion programs and strategies will be the key to the success of Saudi Stars Program Public Information Campaigns

Press Conferences

Outdoor Media

Print Media

Promotional Strategies Broadcast Media

Online Media

Newsletters

Sponsorship •

Primarily three categories of sponsors are being targeted with varying amount of fee structures for each

They will get visibility at all the tournaments, events and media functions being organized by the Program

The program has already garnered strong support from Pepsi Co, a multi national company, as a Category 1 sponsor

Public Relations

Sponsor Category

Fees (SAR)

No. of Sponsors

Category 1

3,000,000

2

Category 2

2,000,000

2

Category 3

1,000,000

3

Source: Sutherland Research

© 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com January 15, 2013

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Revenues are expected to grow exponentially with net profit margins posting above 40% returns consistently in long term Income Statement Projections (in SAR mn) Particulars

Profitability Ratios

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR 13.9

52.5

91.8

138.1

211.2

97%

Sponsorship revenue

13.0

14.3

15.7

103.8

133.2

79%

Total Revenue

26.9

66.8

107.5

242.0

344.4

89%

Operational Expenses

10.7

26.3

46.0

77.4

123.2

Gross Profit

16.2

40.5

61.5

164.5

221.2

Total Overheads

12.6

14.2

15.9

61.2

76.6

Net Profits

3.6

26.2

45.7

103.3

144.6

Revenue (in SAR mn)

Sales Revenue

400 350 300 250 200 150 100 50 0

Particulars

92%

Year 1

Year 2

Year 3

Year 4

Year 5

Return on Equity

30%

168%

109%

118%

76%

Gross Profit Margin

60%

61%

57%

68%

64%

Net Profit Margin

13%

39%

42%

43%

42%

151%

344.4

60% 242

40%

107.5 66.8

26.9 Year 1

Year 2

Year 3 Revenues

Gross Margin

Year 4

80% 70% 60% 50% 40% 30% 20% 10% 0%

Year 5

Net Margin

Source: Sutherland Research

Š 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com January 15, 2013

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With zero debt finance and positive cash flows, the company plans to expand through its bulging cash reserves Capital Funding

SAR

USD

A total investment of SAR 12,000,000 will be needed for the establishment and operations of the Saudi Stars Program

Seed Capital Applied

9,000,000

2,400,000

Of the total capital to be raised, 0% is to be raised by means of debt. The entire capital employed will come from equity

Capital to be Raised

3,000,000

800,000

Total Capital

12,000,000

3,200,000

A total of 40 equity shares are to be issued. Of the total number of equity shares, the promoters/developers share is 40%, through goodwill, which amounts to 16 of the total 40 shares available

Paid Per Share

500,000

133,333

Share Value

300,000

80,000

The remaining 60% of the shares (i.e. 24 shares) are available at SAR 500,000 per share

Share % to Capital Total Number of Shares

40

Goodwill for Developers

16

Total Number of Shares

24

Cash Flows •

The project is expected to generate positive cash flows from the first year onwards

The cash in hand at the end of year five is expected to reach 376.0 million SAR ( a CAGR of 116% over the five year period)

Considering the scale of the venture, the magnitude of cash flows pictures an healthy returns

4.17%

SAR Opening Balance

---

Total Cash-in

38,938,600.0

Total Cash-out

23,563,308.0

Closing Balance

15,375,292.0

Source: Sutherland Research

© 2012 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com January 15, 2013

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