Pink Ruby Flashcards
Walk me through a deal
What type of healthcare does the US-based subsidiary focus on?
Sexual and reproductive health for women of all ages
The subsidiary serves over 1 million patients and offers both asynchronous and synchronous consultations.
What was the valuation multiple paid by the parent company for the majority stake in 2021?
~2.0x EV/Revenue
EV stands for Enterprise Value.
What is the current valuation issue faced by the client regarding their US subsidiaries?
Valued at SOTP; confusion on how to value US subsidiaries
SOTP stands for Sum of the Parts.
What is the client’s proposed strategy for the US assets?
Dispose of US assets and focus on Canada
This strategy aims to achieve higher ROI and realize tangible synergies.
What has been the company’s performance in light of macroeconomic conditions?
Performed well, surpassed expectations, expanding EBITDA margin
The company is currently expanding the EBITDA margin through operating leverage.
What is the current EBITDA margin and what is it expected to grow to by 2028?
Current: ~4%; Expected: ~20% by 2028
Who did the client hire as financial advisors for the sell-side mandate?
Us, given US capabilities and relationships with CIBC
CIBC was chosen to run a broad process for asset disposal.
Has the transaction closed yet?
No, currently in an exclusivity period with one buyer
The exclusivity period lasted 45 days but ended due to buyer concerns.
What is the current interest situation regarding potential buyers?
Receiving interest from a sponsor that bid in phase 2
This sponsor was previously outbid and did not enter the due diligence process.
What interesting development is happening with the parties involved in the bidding process?
Discussions between two parties for a potential joint bid
One party may invest strategically to help raise capital for acquisition.
What challenges does the company face as a DTC provider?
High marketing expenses as % of revenue; low LTV/CAC
LTV stands for Lifetime Value and CAC stands for Customer Acquisition Cost.
What is the estimated LTV/CAC ratio mentioned?
Roughly 2x
What is a notable competitor mentioned that has outperformed the market?
Hims & Hers
This competitor grew approximately 40-50% in value and expanded into new products like GLP-1.
