Unique opportunity to acquire a majority stake in Moroccan market’s second telecom operator
Already successful in the Turk and other MEA markets, our client hired us to implement their regional expansion strategy.
Amongst the decisive considerations that were made, one consisted of implementing a regulatory clearance to add fixed-line products to the existing mobile operations.
Due diligence was delivered with a valuation that included the diversification strategy for fixed line.
Dataroom based report was further enriched by the inclusion of:
Client bid was submitted with valuation at US$ 1,800 million. Shares were finally acquired at the same valuation level by current shareholders.
Due Diligence for the acquisition of 10 Bellsouth International Latin American operations by Telefonica Spain
On behalf of Bellsouth International, we led the sell-side activity of Peruvian operations.
We contributed to Telefonica’s Due Diligence through the provision of analytical input shedding light on the most relevant valuation characteristics of the customer base.
In parallel, we created a 12-months exit program that was designed to achieve the local operations’ cash out aims.
Costs of Goods Sold were analyzed and modeled to reflect the impact of projected migration to GSM by the future investor. CPGA reduction and customer retention (churn) played a key role in the business case required to justify the migration CAPEX.
For the sell-side (Bellsouth International), we executed a transition plan to mitigate the negative perception on both employees and customers due to the threatening increase of Telefonica’s dominant position in the Peruvian mobile market.
The complete sale was closed at a bid price of US$ 5,500 million. Additionally, Bellsouth International achieved 120% of cash-out exit objectives.
Valuation of mobile network infrastructure for an alliance between two major service providers in the Saudi market
After successfully entering the market, our Client approached us to be their representative in order to craft an infrastructure sharing deal with the incumbent. Our role comprised of the complete planning and execution of the confidential approach and business case, as well as the contract negotiation.
Clearance of basic principles of the agreement was achieved through unofficially involving the regulatory authorities. We also provided benchmark-based valuation, and identified potential bidders and operators for the independent infrastructure entity.
Deep analysis of both networks was confidentially performed so as to assess complementarity of assets on both sides.
This Due Diligence allowed us to create an economic model that was required to formulate a valuation of the targeted legal entity with approximately 30000 towers representing one of the world’s largest deals of this sort. Valuation approach was submitted to both parties for validation before delivering proposed share ownership of the future passive infrastructure firm.
A 49% ownership deal for each party was proposed, put on hold and then reopened in 2016. The unfolding of these negotiations is in progress
Merger of 2 mobile service providers in the Peruvian market
Telefonica market share after merging Telefonica and Bellsouth Peruvian assets increased to 74%, thereby creating a dominant position with a regulatory risk. Additionally, the replacement of CDMA and TDMA by GSM threatened customer loyalty.
We were asked by Telefonica to create and deploy a program that included the migration of all customers to GSM, the transformation of customer operations and the merger of call centers.
A customer driven, multi-functional SWAT teams-based plan was designed and completely executed within 19 months. Our executions included a zero-based customer-facing processes re-design allowing the execution of nearly 100% of customer care requests on the first interaction.
We reached 30% OPEX savings after completing a wireless network infrastructure migration, an IT applications overhaul, and after converting two call centers into a third one. Rebranding of the mobile operator to “Movistar”was also part of this successful transformation.
Operationalized merger was executed 5 months ahead of the 2 years commitment, enabling an improvement of EBITDA margin to 45%
Post-merger Project Delivery Services transformation to realize synergies and improve Quality and Predictability
After merging few telecom equipment vendors over several years, the company was making little progress on expected synergies. Customers also were unsatisfied with Project Delivery Quality and Predictability. Our role started after the creation of a single worldwide organization for delivery services โ a key part of revenue realization.
Global footprint was 130 countries and involved over 50000 employees or ~50% of workforce. With a high variety of project-types, of customer involvement levels, and local capabilities, reduction of complexity was a key challenge. The objective of exceeding 30% average SVM – close to USD 300m reduction in projects costs – required the introduction of renewed discipline after introducing best practices.
A program was established, composed of 10 improvement projects. Initial priority was the improvement of the variance between “Estimated vs Contract vs Actual” project costs management. Approaches to estimated costs, client and risk management, delegation of authority were revamped. A Global Center of Excellence in Lean Six Sigma was setup to support targets signed off by the markets.
New capabilities were created including remote networks integration, Project Management process standardization and continuous improvement. Other program components included supply chain rationalization and digital transformation, automation of inventory management, workforce planning and quality management, contractors reduction and contracts renegotiation, introduction of standard performance management and market governance practices.
SVM increased by 500bps in 24 months, duplicating the initial ambition. New capabilities have delivered additional results after program closure. Program was a key contributor to over 3X share price increase in 5 years.
Digital transformation of presales process Configure โ Pricing โ Quote.
With an extreme fragmentation of the tools, processes, performance measures and access to knowledge, ALU was confronted to high presales costs and low customer satisfaction. RFP filtering was empirical with low or untracked win rates. Dependency on around 70 different in-house tools for configuration and solutions pricing – with few employees capable of using them – created bottlenecks. Bid turnaround lead-times were 3 to 4 times longer than customers’ expectations.
ALU also decided to enter a new market segment with different go-to-market strategies for the GAFAs and Enterprise segments. Key question was how to reduce lead-times, mitigate dependency on in-house tools, define and follow best practices and incorporate new go-to-market operating model, all at the same time
We started with the creation of a zero-based operating model tailored for the new segments which allowed the introduction of agile processes and software-driven transformation with a standard solution.
This enabled the new segments sales teams to thrive, but it also provided the needed pilots to demonstrate to the resisting parties involved in legacy portfolio that change was possible. In parallel, the AGILE development of a user friendly and commonly used software dedicated to one BU allowed us to create other quick wins.
Enablement of an Operating model specifically tailored to indirect channels for new segments. 50% reduction of offer cycle lead times and 15% of presales costs. Program was a key contributor to over 3X share price increase in 5 years.
Operating model Transformation to achieve fixed costs efficiency
With over USD 6B of fixed costs, ALU required to reduce by USD 1B (or 17%) its fixed costs to remain competitive. We took direct leadership for the set of programs that addressed ~USD 600m or 60% of the total reductions addressing exclusively the Fixed Operating Costs.
Operating Model Transformation (SHIFT) Transformation strategy was based on the improvement of time and quality dedicated to supporting customer and revenue critical teams. Savings were mostly driven by decommissioning of IT hardware and applications, by a global real estate relocation program, and by a worldwide digital transformation of support tasks where people interfacing was non-critical. Analysis of the highest value add HR and Finance tasks and deliverables was done.
Process redesign and digitization, consolidation of resources, outsourcing and remotization of support services allowed for a complete digital transformation of these functions. Closure of 30 sites vs previous geographic footprint was made possible through relocation and transfer of some account management to indirect channels. Regional functional support services hubs were put in place with a common set of performance KPIs.
IT CAPEX dedicated to legacy platforms reduced by 70%. Partially reallocated to new applications with combined CAPEX + scalable OPEX components allowing digital transformation. 50% reduction of real estate OPEX with USD 200m generated in cash through assets sale. Program was a key contributor to over 3X share price increase in 5 years.
Organic growth strategy for power generation-turbines manufacturer
With growing demand for energy in MENA market, this regional turbines-manufacturing leader โ under SIEMENS license – requested the development of a scenario-based growth strategy. Analysis identified 3 possible growth scenarios based on i) hardware export sales ii) extension of national services portfolio iii) deployment of MENA-wide maintenance services.
Market analysis and projection were used as a basis for risk and return detailing of the 3 scenarios. Firm capabilities were analyzed, as well as estimated investments of each scenario. After selection, a strategy was defined, including competitive and functional components as well as the operating model redesign and org structure evolution.
Deliverables also included a 2 years implementation plan including governance practices, planned strategy-update milestones and on-the-job resources training.
Complete 3-year strategy delivered with predefined review milestones and estimated impact on company value. Client was able to achieve diversification and exceed USD 2B sales with improved EBIT to become the largest and most profitable company of the sector in the MENA market.
Growth strategy for large differentiated engineering services company
Client is an engineering services contractor with footprint in 6 countries in ME & Africa. Past expansion was obtained by following legacy customer in their growth. Shareholders’ request was to consolidate and increase differentiation and revenues. A 3-year-strategy was developed, paving the way for shareholders’ exit objectives.
Firm’s capabilities were explicitly defined, and a pragmatic 12 months org structure transformation and human capital investment was proposed. Organic growth plan leveraged selected opportunities to be prioritized in a business development plan.
Services portfolio was redefined accordingly considering profitability criteria. Training and talent hiring of employees and management enabled strong consistency with growth strategy. The incentives and communications plan became the cornerstone of execution success, ensuring clarity of differentiation for the current and new customer base.
Brand differentiation with customers is at all times high. Operating profits have increased 70% in 5 years (single digit growth in revenues). Services portfolio revenue-mix has been transformed with low margin activities dropped and replaced with specialized, value add engineering.