Warburg Pincus and Emgs: the Ipo Decision
Warburg Pinus and emgs: The IPO Decision |
Executve Summary
With wide geographic and sectorial reach, Warburg Pincus had a flat structure and decentralized deal approval process. In the first part of our report, we commented on the merits of these features and how they helped the group make investments. Warburg Pincus acquired emgs in 2004 and was considering its IPO. Throughout time, Warburg Pinus had added real value to emgs via operational, financial and strategic improvements. We believed that emgs was ready to go public and will give our views on the two options of listing location. Basically, the NYSE offered higher liquidity and better valuation but, at the same time, imposed higher cost in terms of reporting, investor relations and so on, while a oslo listing was simpler and within the management ‘s comfort zone.
In this report, we conduct two valuations of emgs as an oilfield service firm and a technology company respectively. By assigning different WACC and FCFF, we determined that the emgs was worth $1266.85MM based on OHM information and $616.65MM using tech comparables. At last, we discussed the reason of the gap in value and why we thought it was more suitable to consider emgs as an oilfield service company.
Warburg Pincus
Warburg Pincus has a flat structure, which is unique in the industry for organization of its size and geographic reach. In this structure, 17 members formed the executive management group, and coordinated activities across sectors and geographies on a macro level. This could take advantage of geopolitical trends and economic growth in specific areas, moving the firm to move on fancy opportunities.
Besides, Warburg Pincus’s deal approval process occurred in a decentralized way. Partners specified in the certain area would take charge of the decision except for unusual situations. The executive group would discuss each case, while the senior partners were primarily playing as consultants. In addition, the team would
Executve Summary
With wide geographic and sectorial reach, Warburg Pincus had a flat structure and decentralized deal approval process. In the first part of our report, we commented on the merits of these features and how they helped the group make investments. Warburg Pincus acquired emgs in 2004 and was considering its IPO. Throughout time, Warburg Pinus had added real value to emgs via operational, financial and strategic improvements. We believed that emgs was ready to go public and will give our views on the two options of listing location. Basically, the NYSE offered higher liquidity and better valuation but, at the same time, imposed higher cost in terms of reporting, investor relations and so on, while a oslo listing was simpler and within the management ‘s comfort zone.
In this report, we conduct two valuations of emgs as an oilfield service firm and a technology company respectively. By assigning different WACC and FCFF, we determined that the emgs was worth $1266.85MM based on OHM information and $616.65MM using tech comparables. At last, we discussed the reason of the gap in value and why we thought it was more suitable to consider emgs as an oilfield service company.
Warburg Pincus
Warburg Pincus has a flat structure, which is unique in the industry for organization of its size and geographic reach. In this structure, 17 members formed the executive management group, and coordinated activities across sectors and geographies on a macro level. This could take advantage of geopolitical trends and economic growth in specific areas, moving the firm to move on fancy opportunities.
Besides, Warburg Pincus’s deal approval process occurred in a decentralized way. Partners specified in the certain area would take charge of the decision except for unusual situations. The executive group would discuss each case, while the senior partners were primarily playing as consultants. In addition, the team would