Unit 12 · Case
Capstone — What Is Jollof Express Worth?
Capstone Presentations · Ghana · GH₵
This is the student brief. The instructor guide is distributed separately.
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A private-equity fund has offered to acquire one hundred percent of Jollof Express Limited. The founders have asked Mountain River for a valuation and a recommended negotiating position.
Your team will present to a panel. Fifteen minutes, then questions.
What you must deliver
- A discounted cash flow valuation, with a discount rate you have built and can defend. State the currency of your rate and show that it matches the currency of your cash flows.
- A multiples range, with the comparable set justified and the country adjustment argued explicitly.
- A reconciliation of the two. Where do they agree, where do they diverge, and what do you conclude?
- A recommended price band — where to open, what to target, and where to walk away.
Exhibit A · Financial profile
| Line | Amount |
|---|---|
| Revenue | 96.0 |
| EBITDA | 14.4 |
| Depreciation and amortisation | (2.4) |
| EBIT | 12.0 |
| Interest | (1.2) |
| Tax at 25% | (2.7) |
| Net income | 8.1 |
| BALANCE SHEET | |
| Cash | 3.5 |
| Bank debt | 9.0 |
| Net working capital | 2.1 |
| Net property and equipment | 21.0 |
Exhibit B · Operating information
| Item | Value |
|---|---|
| Outlets | Twelve, all company-owned |
| Recently opened | Two within the last eighteen months, not yet at mature revenue |
| Average outlet fit-out cost | GH₵2.4m |
| Typical refit cycle | 5–6 years |
| Maintenance capex, last year | GH₵2.8m |
| Revenue growth, last three years | 18%, 14%, 11% |
| Leases | Four fall due for renewal within two years |
| Management | Founders remain in day-to-day management |
| Ghana inflation (expected) | 20% |
| Ghana corporate tax rate | 25% |
So that the panel is comparing like with like, every team should forecast **five explicit years** and hold net working capital at its **current percentage of revenue**. Every other assumption is yours to make and yours to defend.
Exhibit C · Market inputs
| Input | Value |
|---|---|
| 10-year US Treasury yield | 4.0% |
| US market risk premium | 6.0% |
| US inflation (expected) | 2.0% |
| Global restaurant industry beta | 0.95 |
| Ghana sovereign spread over US Treasuries | 600 bp |
| Comparable set | Multiple |
|---|---|
| Global QSR groups | 14.50× EV/EBITDA |
| Emerging-market QSR operators | 8.75× EV/EBITDA |
| African listed food and beverage | 5.75× EV/EBITDA |
| African listed food and beverage | 8.00× P/E |
What the panel will ask
Prepare for these four. They are asked of every valuation, every time.
What is driving the number? · Why those comparables? · What would change your mind? · What don't you know?