Business Case Studies & Business Publications

Palamon Capital Partners/TeamSystem S.p....

Bruner, Robert F.,...

Case

Palamon Capital Partners/TeamSystem S.p.A

Bruner, Robert F.; Rynbrandt, Chad; Carr, Sean

F-1331 | Published May 21, 2001 | 20 pages Case

Collection: Darden School of Business

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In February 2000, a managing partner of a UK-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.