Online financial services - considering a joint venture
PricewaterhouseCoopers' client, a leading service provider, was negotiating with a medium-sized bank to form a joint venture to deliver online financial services. In order to make progress, the client needed to understand the value of the assets being contributed, both by themselves and their bank partner.The PwC team was able to attribute indicative values to a number of the client's assets - brand name, customer database and the existing financial services business. Our client had not considered the value implications of either the proposal or the joint venture structure; nor had they determined the expected returns from the project. This meant that they were unable to benchmark this project against other internal projects. Working closely with the project team, and within a very short timeframe, PwC was able to provide the client with a greater understanding of the value this type of joint venture would create.
The PwC team illustrated the value creation potential of the joint venture by assessing the value of the project at inception, as well as the potential exit values and the investment returns. To devise a negotiating strategy for our client, we developed a framework that helped them attribute a value to the assets being contributed by their potential partner. By identifying the key assets each partner was contributing and the benefits each was likely to get, our client was able to negotiate from a knowledgeable position of strength.
