Value Accretion Strategy
Hi all, just wanted to get everyone’s feedback on a corporate exercise my firm is doing. Over the past year we have slowly engineered a reverse takeover and we are now on the final phase which would be injecting/acquiring a property development company (majority shareholder’s private co.) however given soft market sentiment for property development we are looking for ways we can increase the value of the target co (the property development co).
We have some strategy in mind but wanted to get your opinion as well as if you have any other idea on what we can do:
1) Improve gearing ratio. We have taken a look at the comps universe and have noticed a positive correlation between gearing ratio and valuation multiple thus by improving our gearing we can use this as rationale to fetch a higher valuation.
2) Get an institutional investor or any other influential investor in before the injection/acqusition. We believe that by having them in, it will act as a rubber stamp
3) Acquire other non property related company diversifying the company which will hopefully provide a multiplier effect
What do you guys think of the strategies, is there anything else that can be accomplished?
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