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Abolmasov_c5_march2011
Abolmasov_c5_march2011
Abolmasov_c5_march2011
Abolmasov_c5_march2011
Abolmasov_c5_march2011
Abolmasov_c5_march2011
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Abolmasov_c5_march2011

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  • 1. NewRussiaGrowth
    Private Equity Advisors
    Mezzanine opportunities in Russia
    March 2011
  • 2. Mezzanine
    In architecture, a mezzanine - an intermediate floor  or the lowest balcony in a theatre.
    (from Italian mezzano “middle”)
    • Cash Interest
    • 3. PIK Interest
    • 4. Ownership (equity kicker)
    • 5. Pre-money EV $80m
    • 6. Equity $60m
    • 7. Debt $20m
    • 8. New investments $20m
    PE – 25% post-money EV$100m
    Mezz– Debt $20m @ 8-10% plus 10% option call @ $60m Mcap
    3x growth
    2
  • 9. Standard Terms of VRG Transactions
    Investment Structure
    • Hybrid investments (collateralized debt + equity kickers)
    • 10. 18-54 month repayment of investment capital
    • 11. Ticket size: $10 – 50m
    • 12. Collateralized
    • 13. Pledge of target companies’ shares, liquid assets
    • 14. Personal guarantees of the companies’ owners
    Target Returns
    • 10%+ targeted interest/current return
    • 15. Equity kickers leading to 30%+ targeted gross return
    3
  • 16. 2011 NRG Investment Case Study: Begemot
    Company Description
    • Leading toy retailer in Russia, second only to Detskiy Mir in terms of revenue from toys
    • 17. Focus on mid-market and low-cost segments with retail prices 40% lower on average than in DetskiyMir
    • 18. 54 owned shops and 144 franchisees in 192 Russian cities
    • 19. Key toy supplier for leading retail chains in Russia, such as Magnit, Perekrestok and Sedmoi Continent
    • 20. In-house ERP system allows daily control of all sales and stocks
    • 21. Average markup is 75%: Private label markup is 250%, which accounts for 15% of total sales
    • 22. EBITDA in 2010 has grow by 45% as a result of significant increase in number of franchisees
    • 23. After new debt, the debt/EBITDA ratio below 2x
    Key Financials
    4
  • 24. 2009 NRG Investment Case Study: Begemot
    Transaction Structure
    5
  • 25. NRG at a Glance
    • Top-5 independent alternative investment manager with focus on Russia & CIS
    • 26. Currently NRG works with Volga River One Fund, which has successfully invested in various Russian companies from telecoms to baby food producers
    • 27. NRG completed the 1st closing of Volga River Growth Fund in 4Q 2010
    PrivateEquity
    Hybrid Equity
    Volga River One
    Volga River Growth
    • Established in 2006
    • 28. 20 LPs
    • 29. $177m
    • 30. Team of 10 professionals
    • 31. 5 portfolio companies, 1 exit
    • 32. Established in 2010
    • 33. 1st closing: Q4 2010
    • 34. Target size: $250m
    • 35. Team of 5 professionals
    • 36. Leading Investor for 1 closing: EBRD
    6

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