Palamon case study
DardenBusinessPublishing:209887
UVA-F-1331
This document is authorized for use only by John McFadden at Temple University- Fox School of Business.
Please do not copy or redistribute. Contact permissions@dardenbusinesspublishing.com for questions or additional permissions.
Rev. Feb. 12, 2014
PALAMON CAPITAL PARTNERS/TEAMSYSTEM S.P.A.
We want to make money by investing in change.
—Louis Elson, Managing Partner, Palamon
In February 2000, Louis Elson looked over the London skyline and reflected on the international private equity industry and the investment processes that would be necessary for success in this increasingly competitive field. Elson, a managing partner of the UK-based private equity firm Palamon Capital Partners, was specifically considering an investment in
TeamSystem S.p.A., an Italian software company. Palamon was interested in TeamSystem for the growth opportunity that it represented in a fast-changing market. Palamon had an opportunity to purchase a 51% stake in TeamSystem for (euros) EUR25.9 million. In preparing a recommendation to his colleagues at Palamon, Elson planned to assess TeamSystem’s strategy, value the firm, identify important risks, evaluate proposed terms of the investment, and consider alternative exit strategies.
International Private Equity Industry
The international private equity industry was segmented into three sectors. Venture capital funds made high-risk early-stage investments in startup companies. Generalist private equity funds provided expansionary funding or transitional funding that allowed small companies to grow and eventually go public. And leveraged buyout funds financed the acquisitions (often by management) of preexisting companies that had the capacity to take on debt and make radical improvements in operations.
Private equity funds raised capital primarily from individual investors, pension funds, and endowments that were interested in more attractive risk/return
UVA-F-1331
This document is authorized for use only by John McFadden at Temple University- Fox School of Business.
Please do not copy or redistribute. Contact permissions@dardenbusinesspublishing.com for questions or additional permissions.
Rev. Feb. 12, 2014
PALAMON CAPITAL PARTNERS/TEAMSYSTEM S.P.A.
We want to make money by investing in change.
—Louis Elson, Managing Partner, Palamon
In February 2000, Louis Elson looked over the London skyline and reflected on the international private equity industry and the investment processes that would be necessary for success in this increasingly competitive field. Elson, a managing partner of the UK-based private equity firm Palamon Capital Partners, was specifically considering an investment in
TeamSystem S.p.A., an Italian software company. Palamon was interested in TeamSystem for the growth opportunity that it represented in a fast-changing market. Palamon had an opportunity to purchase a 51% stake in TeamSystem for (euros) EUR25.9 million. In preparing a recommendation to his colleagues at Palamon, Elson planned to assess TeamSystem’s strategy, value the firm, identify important risks, evaluate proposed terms of the investment, and consider alternative exit strategies.
International Private Equity Industry
The international private equity industry was segmented into three sectors. Venture capital funds made high-risk early-stage investments in startup companies. Generalist private equity funds provided expansionary funding or transitional funding that allowed small companies to grow and eventually go public. And leveraged buyout funds financed the acquisitions (often by management) of preexisting companies that had the capacity to take on debt and make radical improvements in operations.
Private equity funds raised capital primarily from individual investors, pension funds, and endowments that were interested in more attractive risk/return