This case study is rooted in corporate finance. The objectives are to determine the value and the price of a non-listed champagne house in a context of mergers and acquisitions (M&A). The participant is a vice president of a leading investment bank advising potential acquirer. He or she is assigned to implement commonly used valuation approaches, to analyze the resulting values and to present a range of reasonable values and prices for this company. Although the company is fictitious, it is realistic, and the case is based on the authors’ professional experience. Champagne houses are French processing companies that may be acquired by wine and spirits companies to complement their product portfolio and position the product as one of the jewels of their wine collection. The company’s name, Champagne Leblanc-Lenoir, is a registered trademark. The case provides the opportunity to get a good understanding of the specificities of the Champagne market, apply and discuss different concepts and key methods of corporate valuation in an international context: income approach (Discounted Cash Flow method), market approach (guideline public company method and guideline transaction method) and cost approach (restated net asset value method after revaluing land, real estate, brand and inventory). It also examines the difference between value and price. The case consists of two parts: – Overview of the champagne business, including its drivers, strengths, weaknesses and risks, – Focus on corporate valuation concepts and methods.
DECLERCK, F. et GOUNEL, T. (2013). Project Bubbles Champagne Leblanc-Lenoir : corporate valuation in an M&A context. ESSEC Business School.