Entrepreneurial Finance and Private Equity

Late Stage and Buyouts

Class #12 – Monday, November 25, 2002

LBO

Case:    The Exxel Group:  September 1995 (9-297-068)

Optional Reading:  “Practices of Active Private Equity Firms in Latin America.”  (UVA-F-1336)

Network File:   EXXEL.xls

 

  1. How is investing in emerging market countries similar to or different from investing in the United States?  In Europe?

 

  1. How has Navarro gone about developing a “franchise” for Exxel in Argentina?  How has his relationship with Oppenheimer evolved?  What are the strengths or weaknesses of this form of international private equity organization?

 

  1. Is Argencard an attractive investment?  Why or why not?  How reasonable is the valuation that Exxel proposes to pay?

 

  1. Why has Exxel chosen the particular structure that it has for the proposed transaction?  What are likely to be the objections that U.S. private equity organizations that are considering investing in the deal will raise about the proposed term sheet (reproduced in Exhibit 10)?

 

  1. What opportunities and challenges will Exxel face as the Argentine private equity market evolves?  As the U.S. private equity evolves?