Transcript INTERNATIONAL MARKET ENTRY

OPENING THE DOOR IN THE EAST
TO WESTERN CAPITAL
Alexander Aginsky
Aginsky Consulting Group
Presentation Outline
Who
is ACG?
Regional highlights: why go to Russia?
Motivation for collaboration
Sample western financing options
What do investors look for?
Conclusion
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Who is ACG?
Headquartered in U.S. – West Coast
 Boutique and entrepreneurial firm
 Industry agnostic
 Geographic specialization in markets of Russia and CIS
 Staffed by MBA graduates from top-tier U.S. business
schools (Harvard, Yale, Thunderbird, Columbia, etc.)
 Customized project teams for each individual client
engagement
 International project implementation experience
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ACG Service Offering
Wide range of consulting services
Business services
 Market and industry study;
 Competitive landscape analysis;
 Business strategy development & planning;
 Distribution and channel partnership building;
 Emerging markets product/service launches;
Financial services
 Conversions of Russian financials into US GAAP;
 Due diligence and enterprise valuations;
 Financial projections and ratio analysis;
 Investor solicitation – roadshows;
 M&A advisory and deal structuring.
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Regional Highlights
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FDI into Eastern Europe and the CIS:
2007: the highest-ever levels of foreign
direct investment (FDI) in the region.
Foreign investors injected some $69
billion into the region last year, up by
56% compared to 2005, with Russia
receiving the lion's share. (World Bank)
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Why go to Russia?
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Reasons for American companies to
invest in the CIS
 Grow revenues
 Lower overhead costs
 Higher prices + Lower costs = Greater margins
 Limited/declining home market or excess capacity
 Global competition
 Gain access to a distribution network
 Broaden an existing product portfolio
 Global branding, exposure and geographic reach
 Diversify global risks
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Reasons for CIS companies to solicit
Western partners/investors
 Capital
for rapid expansion
 Lower transaction & financing costs
 Cheaper regional financing as a result
 Access to global markets through new partners
(New distribution and sales channels)
 Improved reputation, marketability, & credibility
 Industry expertise and knowledge transfer
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Sample western financing options
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International development banks
Government organizations
Lending institutions
Investment banks
Strategic alliances
Private equity & hedge funds
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Development banks
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In 2006 the IFC (World Bank) committed and
mobilized more than $2.1 billion for the
regions of Europe and Central Asia
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In 2006, the EBRD Invested 1.9 billion euros
into Russian enterprises. It is also the largest
financial investor in Ukraine.
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Government organizations
OPIC: Since 1992 it has provided more than
$3.8 billion in finance and insurance for a
total of 115 projects in Russia.
 EXIM Bank: authorizations for Russia average
$150 MM annually. Outstanding portfolio of
approximately $1.4 billion for all three of
their products – insurance, direct loans, and
bank guarantees.
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Lending institutions
Western banks with a substantial
presence in Russia:
 Raiffeisenbank
 Unicredit
 PNB Parisbas
 Citibank
 Deutsche Bank
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Investment banks
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UBS
Merril Lynch
Goldman Sachs
JP Morgan
Morgan Stanley
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Strategic alliances
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TNK-BP
Conoco Phillips-LUKoil
GM-AvtoVaz
Boeing-VSMPO-Sukhoi
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Private equity
The Emerging Markets Private Equity Association (EMPEA) reported that:
of all private equity groups surveyed, 61% intended to invest in CEE/Russia in
2007, and as much as 87% by 2012.
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Bearing Vostok, AIG Interros, Franklin Templeton, Quadriga Capital, Mint Capital, Eagle
Venture Partners, Russia partners, Breeze Venture Management.
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What do investors look for? (intangible)
Long-term vision
 Successful track record
 Language and cultural understanding
 Transparent dealings
 Professional management team
 Professional advisers
(accountants, attorneys, consultants, etc.)
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What do investors look for? (tangible)
Reconciliation
(US GAAP) of financial statements
Financial projections
Detailed third party due diligence
Corporate, financial, legal audit
Business plan
Market research
Valuation
NPV, IRR, and Payback period analysis
Investor PowerPoint presentation
Private Placement Memorandum – PPM
Term sheet
Subscription agreement
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Conclusion
 The
time for cooperation between U.S. and
Russia has never been better.
 Plenty of resources on both sides to be taken
advantage of.
 Have a clear strategy and an end result in mind.
 Know the process and requirements for getting
to that end result.
 Rely on experts who can “bridge” the needs and
wants of all parties internationally.
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For a copy of this presentation please contact us directly.
Thank you
AGINSKY CONSULTING GROUP, LLC.
WEB: www.aginskyconsulting.com
EMAIL: [email protected]
TEL: 877-WITH-ACG