What is it that makes your company valuable relative to its competitors? Is the value of the separate business units greater than the overall valuation of the combined entity? Business owners ask these practical questions every day, and the range of suggested valuations can stretch across the widest reaches of the Grand Canyon.
Penserra CEO and Founder Jorge (George) Madrigal was curious about these questions in order to better understand his strategy for future M&A transactions. A few years ago, Jorge worked with a third-party valuation firm to conduct an analysis of a target acquisition. He was pleased with the valuation models used for that analysis and wanted a valuation model built that he could use in-house. While considering this project, Jorge came across Illinois Business Consulting (IBC) through Gies College of Business at the University of Illinois. After a thorough consultation with IBC, he was impressed with the team of remarkably talented, highly motivated students that could bring fresh thinking and an outsider’s perspective to the opportunities presented to Penserra. In collaboration with IBC, Penserra teamed with the students to deliver actionable results as well as support young minds seeking to learn more about the financial services industry.
Nine knowledgeable students – five men and four women from diverse cultural and ethnic backgrounds – were selected to assist Penserra. Each IBC student/consultant brought to the project an impressive array of qualitative and quantitative skills, augmented by rigorous academic instruction facilitated by the Gies College of Business, enabling them to add significant value to a high priority project.
The IBC student team was tasked with creating a valuation tool that could be used to value an entire target company or a specific division. As a test case for the valuation model, the team used information from Penserra and its divisions. Using various valuation techniques, the team was able to create a valuation model to better understand the enterprise value of the company relative to its competitors.
To maximize their deliverables, the IBC team members charged themselves with gaining a deep understanding of not only the functionality of Penserra and its related entities but also the intricacies and complexities of the financial services industry. In-depth weekly meetings between the student/consultants and senior Penserra management helped bridge the gap between the scholarly theories of the academic universe and the realities of a volatile and heavily regulated professional environment.
After nine weeks of intensive research and analysis, accompanied by weekly meetings and a steady stream of shared information, the IBC team delivered a comprehensive report and model offering a range of potential valuations as well as detailed recommendations applicable to Penserra’s strategic direction. Based on the results of their work, the remarkable, hard-working team of IBC student consultants provided Penserra with a useful valuation model and potential options for future growth.
Penserra applauds the efforts of the team of talented student consultants from the University of Illinois Gies College of Business. You’ve each done an amazing job and have much to be proud of. We are certainly proud of you. Thank you.