Case Name :      Palamon Capital Partners/TeamSystem S.p.A

Authors :           Robert F. Bruner, Chad Rynbrandt, Sean Carr

Source :             Darden School of Business

Case ID :           UV0091

Discipline :        Finance

Case Length :    20 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In February 2000, a managing partner of a U.K.-based private equity fund, Palamon Capital Partners, faced the decision of whether to invest in an Italian software company, TeamSystem, S.p.A. The rationale for this investment was a belief in the rapid future consolidation of the enterprise software industry in Italy, in combination with improvements in operating performance believed to arise from a stronger investor orientation after the transaction. The transaction entailed a leveraged recapitalization of the target that would significantly change its ownership, control and leverage. The task for the student is to evaluate the attractiveness of the investment, based on a strategic appraisal, a valuation of the target with its new capitalization, and an assessment of the proposed deal structure.