Pfingsten Partners, LLC
Pfingsten Partners, LLC was formed in 1989 as an operationally oriented private equity firm based in Chicago, IL which invests in middle market manufacturing, distribution and business service companies. Since completing its first investment in 1991, Pfingsten Partners has been building value in partnership with management through operational improvements, professional management practices, global capabilities and profitable business growth.
In conjunction to its new fund (Fund IV), Pfingsten has identified storm water management products as an industry for possible direct investments. To better understand the industry of storm water management Pfingsten asked their Nicholas Center student team to research the industry and create an investment strategy.
The student team had two initial deliverables. First was to define the storm water management products industry by defining the demand drivers and projected growth rates as well as major players and product portfolios. The second was to provide an overview of the current M&A environment for storm water management companies by identifying recent transactions and corresponding EBITDA multiples. Students then created an acquisition target list identifying the top acquisition candidates that fell within Pfingsten Partners’ investment criteria.
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| The Leadership in Energy and Environmental Design (LEED) Green Building Rating System |
Going green has become all the rage and attaining the Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ certification is much sought after. LEED is a third-party certification program and the nationally accepted benchmark for the design, construction and operation of green buildings giving building owners and operators the tools needed to have measurable impact on their building performance. Currently the UW-Madison campus has no buildings that are LEED certified.
This project requested that Nicholas Center students explore the relevant costs to upgrade and energy saving benefits associated with LEED for Existing Businesses (LEED EB) certification of Grainger Hall, and calculate the associated return on investment (ROI). Students were also asked to develop a model that can be used anywhere on campus to estimate expected costs and benefits of gaining the LEED certification.
Students quickly learned that nothing had to be done to Grainger Hall except pay for the assessment and certification of the building. The project then morphed into a marketing research study on the marketing/advertising/media attention benefits attributed to the LEED certification followed by a cost of certification vs. marketing benefit analysis. The student team contacted many top universities to determine any quantified marketing benefits that have led to enhanced recruitment and student quality.
Janus Capital Group, Inc. is a public company headquartered in Denver, CO. As of June 30, 2008, Janus manages $191.8 billion in assets for more than four million shareholders, clients and institutions around the globe. For more than three decades the Denver-based firm has used a bottom-up, company-by-company investment approach based on the conviction that stock prices ultimately follow earnings growth.
The focus of the project was for the Nicholas team to complete a thorough and comprehensive assessment of the relationship between Return on Invested Capital (ROIC), growth rates and stock price performance for companies competing in the Medical Technology industry. The main goal of the project was to determine if there is a strong statistical relationship between ROIC and stock price performance and relate this to the Med Tech business models and how management’s appetite for M&A either creates or destroys value.
The team focused on a variety of different tasks. First, they reviewed existing academic, textbook and investment banking materials to provide assessment of the current thinking. Next, they constructed a proprietary statistical analysis of the relationships between ROIC, growth rates and stock price performance. Finally, they provided an assessment of alternative operating and financial strategies that specific companies in the Medical Technology industry could consider to improve their ROIC. Students then presented their findings in the form of a pitch book for Janus to present to Portfolio Managers and management teams in the medical Technology industry.
Westlake Chemical Corporation is an international manufacturer of petrochemicals, plastics and related fabricated products that enhance the daily lives of people around the planet. One of its important products is Polyvinyl chloride, commonly abbreviated PVC. PVC is a widely used thermoplastic polymer and is one of the most valuable products in the chemical industry. It is used in a variety of applications and has been replacing traditional building materials such as wood, concrete and clay.
The focus of the project was on producers of PVC located in Europe who contribute significantly to the supply in the industry, but are small and unable to compete efficiently with other facilities. Westlake requested that students explore the overall ramifications of consolidation of these smaller companies and provide Westlake Chemical with an acquisition target list.
The Nicholas Center team had three main objectives. First, was to assess the likelihood of consolidation in the PVC industry with regard to European producers. Next, if consolidation was likely, identify the triggers that would cause consolidation to occur. Finally, the project team provided an analysis assessing the strengths and weaknesses of the companies in the industry and ranked them as acquisition candidates.
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