By using the Hybrid Growth Diligence approach, we helped assess the intrinsic value and confirm the resilience of the target’s business model by testing:
- Its capacity to maintain a year-on-year double-digit growth, showing its resilience in a market that is still recovering from the Covid-19 pandemic;
- The recurring nature of table payment flows, which may be an upside and pull up valuation;
- Its capacity to retain on its existing clients, while taking into account the seasonal impact of some clients’ activities;
- Its ability to land and expand at group level, after penetrating one restaurant unit, which can foster growth at limited cost;
- The existence of a clear scalability of its model through recalculation of gross profit levels, which were challenged in light with metrics of companies with comparable value propositions.
In validating the target’s ability to grow at scale
and its level of profitability
, we helped our client confirm its investment thesis.