Business valuation mandate in the context of the acquisition of a stake by an international investment fund in the capital of a European airport
Business valuation mandate conducted as part of an institutional investment transaction relating to a major airport infrastructure.
Mandate description
Business valuation mandate carried out on behalf of a investment funds as part of its entry into the capital of a International airport.
The mission aimed to determine the fair economic value of the airport asset, to analyze long-term performance prospects, and to assess the robustness of the financial model in a complex regulatory environment.
The airport concerned had a capacity to accommodate several million passengers per year, important logistical infrastructures and a portfolio of integrated commercial and real estate concessions.
The evaluation was part of a strategic co-investment transaction, aimed at supporting the development and modernization of facilities.
Key issues
The main challenges consisted of:
- Determine the economic value of a regulated infrastructure asset
- model the future cash flows over a long period of time, by integrating operating revenues, commercial fees and extra-airport revenues;
- take into account traffic rights and authorized air routes, which directly condition the reception capacity, the number of companies frequented by companies and the overall profitability of the platform;
- assess the impact of airline concessions and slots on the future value of the asset and on the competitiveness of the airport compared to other regional hubs;
- and insure the methodological consistency between financial and asset management approaches, in accordance with international valuation standards (IVS, RICS).
The evaluation mobilized several complementary approaches:
- one discounted cash flow (DCF) approach, integrating detailed traffic, revenue and CAPEX assumptions;
- one yield-based approach, based on expected profitability ratios for comparable airport infrastructures;
- And a sector-specific multiple approach, based on a panel of international peers.
Approach and results
The work made it possible to determine a coherent and defensible range of economic value, taking into account regulations, traffic and the prospects for expansion of the platform.
The analysis also made it possible to quantify the sensitivity of the valuation to traffic, flight rights and airport pricing assumptions, as well as to the financing structure of the project.
The results showed a strong correlation between the volume of traffic and the performance of commercial concessions (retail, car parks, duty free), underlining the complementarity between the operational and real estate dimensions of the asset.
The valuation served as a technical basis for negotiations between investors.
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
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The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.