Project Alderpoint — Sell-Side Process Launch
A 2-hour Sell-Side M&A / Process Launch case study with a complete model answer
Modeled After
Goldman Sachs
Sell-side kick-off materials for a software sale: sector M&A volume and sponsor share, a named landscape of prospective partners with fund sizes, and a process-breadth decision framework (exclusive / targeted / broad) carrying an explicit recommendation box
Structure and exhibit set are modeled after Goldman Sachs. The company, the financials and every figure in this case are entirely our own.
The Situation
Alderpoint Water Technologies, Inc. builds and services industrial water treatment systems for heavy industry and municipal utilities.
Alderpoint Water Technologies, Inc.
- Sector
- Industrial water treatment — engineered systems, treatment chemistry and consumables, and aftermarket service with digital monitoring
- Size
- Geography
- United States; headquartered in Waukesha, Wisconsin, with municipal and heavy-industry customers domestically and a prospective buyer universe that reaches into Germany, the Netherlands and the United Kingdom
- Ownership
- Situation
The Prompt
You are staffed on a Sell-Side M&A / Process Launch engagement for Alderpoint Water Technologies, Inc. You have 120 minutes to work through the materials and produce an answer deck and an Excel model.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 120 minutes.
PART 1
Operating Model — Management Case
PART 2
Discounted Cash Flow
PART 3
Selected Publicly Traded Companies
PART 4
Selected Precedent Transactions
PART 5
LBO & Sponsor Ability to Pay
PART 6
Valuation Summary — Football Field
PART 7
Buyer Universe & Process Options
PART 8
The launch deck
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished answer deck and Excel model are in the solution set below.
- 01
Fix the LTM number and the addback bridge before anything else
- 02
Screen both extracts before you compute a single median
- 03
Split the precedents by acquirer type, because that split is the case
- 04
Treat the sponsor LBO as a constraint, not a valuation
- 05
Set the range from the overlap, then bridge it all the way down
- 06
Design the process from the buyer universe, not from instinct
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
Preliminary valuation framework
The range a bank markets a company on before any bidder has seen the data room, assembled from several methodologies that will not agree. It is stated in enterprise value here because Alderpoint is private: there is no share price to premium off and no equity value until the debt and cash bridge is applied. Two disciplines make it defensible. Each methodology's axis is the observed minimum and maximum of its own screened set rather than a chosen number, and the basis of every multiple is labeled, so that a trailing multiple is never compared to a forward one by accident.
Buyer universe segmentation
The exercise of turning a list of names into tiers with an ability to pay attached. Scale strategics with overlapping distribution and consumables can underwrite synergies and clear the highest multiples. Adjacent strategics have a thinner rationale and often a balance sheet that constrains a full cash deal. Financial sponsors are bounded by leverage and their return hurdle. Segmenting matters because every process-design question in the case reduces to how many parties in the top tier are in the room, and a list without tiers cannot answer that.
Process breadth — broad, targeted, pre-emptive bilateral
The three ways to sell a company, and the choice between them is a valuation question rather than a scheduling one. A broad auction contacts everyone and buys competitive tension at the price of leakage risk and a longer timetable. A targeted process contacts a short list chosen to include every party that can actually reach the range. A pre-emptive bilateral negotiates with one buyer, closes fastest, leaks least, and gives that buyer the knowledge that it has no competition. Comparing them means quantifying expected clearing value against contact count and elapsed weeks, and being honest about two things. The first is that a broad process means every party that survived your screen, not every row of the extract: a teaser to a party you have just excluded is a leak with no bid attached, and some of the excluded parties cannot transact at all. The second is that the incremental parties are not one group. Sponsors are bounded by an ability-to-pay solve; adjacent strategics are bounded by a thinner synergy case and can sit inside your range even when sponsors cannot. Applying a sponsor ceiling to a strategic is the fastest way to lose the argument. And the expected clearing values themselves are a judgment: if the range you would market on is also the range you expect a targeted process to clear at, comparing the two proves nothing, and the recommendation has to rest on the ability-to-pay work instead.
Representations and warranties insurance as a process lever
On a US private founder-owned sale at around $1.5bn in 2026, a buy-side representations and warranties policy is close to universal, and the seller decides at launch whether to market the deal on that basis. A financial sponsor and a balance-sheet-constrained adjacent strategic both price a survival indemnity into their bid, while a large strategic worries about it least, so removing the indemnity from the negotiation narrows the spread between what the buyer tiers will offer. Treating it as something the lawyers settle after signing forfeits that. The structural consequence is that there is no indemnity escrow, so the only money held back at close is a purchase-price-adjustment escrow and a reserve against appraisal demands under DGCL §262 — both released rather than forgone. A net proceeds bridge with no holdback line implies proceeds are unconditionally payable on the closing date, and they are not.
Sponsor versus strategic ability to pay
A financial sponsor's maximum price is an output of a model: leverage times EBITDA, the cost of that debt, the cash the business generates over the hold, the exit multiple and the return it must clear. A strategic buyer's maximum price is an output of a synergy case and a strategic rationale, and it is not bounded the same way. Treating the buyer universe as one pool averages two different constraints together and loses the argument. In practice the sponsor number is a floor — the price below which the seller has an alternative — and the strategic number is where the process is likely to clear.
Quality of earnings and addback scrutiny
Adjusted EBITDA is a negotiated number, and the bridge from reported EBITDA to it is where a buyer starts diligence. Alderpoint's bridge carries owner compensation above market, an ERP implementation, plant consolidation and severance, and a litigation settlement. Each has a different answer to the question a buyer will ask, which is whether the cost disappears after close. Severance that recurs every year for three years is not non-recurring. Because every multiple in the book divides into this figure, a turn of argument on the addbacks moves the outcome by far more than a turn of argument on the discount rate.
Takeaway-headline construction
The convention that a page's title bar carries a hedged noun-phrase label and the sub-headline underneath carries the actual argument with a number in it. 'Selected Publicly Traded Companies' is the label; the sub-headline says what the set shows about where Alderpoint should trade and why. Takeaway headlines — a full sentence making a claim in the title itself — are reserved for the pages where the bank is advocating rather than presenting. Writing the sub-headline first is a useful discipline, because a page whose number does not support a sentence usually should not be in the book.
Process timetable and milestones
The week-by-week schedule from preparation through signing and closing: information memorandum and data room, launch, first-round indications, management meetings and site visits, final bids and mark-ups, then negotiation, signing and regulatory clearance. It is analysis rather than administration, because the timetable is what a seller trades away when it pre-empts and what it spends when it broadens. Regulatory review has to be built into it at the front — a clearance that adds two months for one class of bidder is a sequencing decision to make at launch, not a surprise at final bids.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: answer deck and Excel model, built the way a banker would actually build them. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —Preliminary valuation framework
- —Buyer universe segmentation
- —Process breadth decision framework
- —Sponsor versus strategic depth
- —Takeaway-headline construction
- —Process timeline and milestones
Answer Deck
Full model answer, banker-formatted
Memo
The written recommendation and how it was reached
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the answer deck, the Excel model and the audio walkthrough.
Get StartedThe Excel Model
The model is linked and tied out end to end — every schedule, every formula and every check, in the file itself.
Downloads are available to Diamond members
Excel Model and PowerPoint Deck and Memo (PDF) and Answer Deck (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Project Alderpoint — Sell-Side Process Launch
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
What is a sell-side process launch case study in an investment banking interview?
It is a case where you build the materials a bank pitches with to win a sell-side mandate, rather than the materials that execute one. The deliverable is a launch book and the model behind it: where the company sits against its peers and against recent control transactions, a preliminary valuation reference range, a segmented universe of prospective buyers with an indicative ability to pay for each, and a recommendation on how broadly to run the process. It tests whether you can turn valuation work into a process design, which is why it appears in M&A groups and at superdays rather than in first-round screens.
How should you allocate 120 minutes across this case?
Across the whole workbook rather than a quarter of it. A working budget that sums to 120: about 20 minutes reading the four documents, building the LTM picture and working through the addback bridge; about 18 minutes screening the raw extract, which is deciding what belongs in each set before you type anything; about 72 minutes at the keyboard, split roughly 15 on the operating model, 20 on the DCF, 20 on the sponsor LBO and the ability-to-pay solve, and 17 on the football field, the buyer tiering and the process comparison; and about 10 minutes at the end for the recommendation and the deck's headline pages. The template asks for 144 authored rows across seven tabs, which fill 444 cells once the sensitivity grid and the two constituent tables are populated — the governing measure is rows rather than cells, because most of a row is one formula copied across five years or a grid. At half a minute an authored row that is 72 minutes of modeling, and the other 48 minutes are the reading, the screening and the recommendation. That arithmetic only works if all of it happens inside the same 120 minutes, so nothing in the budget is slack. The deck is expected to be a skeleton of headline pages, not a finished book.
How much of the deck are you actually expected to produce?
A skeleton of headline pages, not a finished book. Nobody produces a full launch deck in two hours and no interviewer expects one. What is being assessed is whether each page has a two-tier title with the argument in the sub-headline and an actual number in it, whether the hedging conventions are used where they belong, and whether the pages are the right pages: situation and process overview, sector context, positioning against the selected companies, preliminary valuation summary, buyer universe, process comparison, recommendation. Spending 40 minutes formatting one page and submitting a workbook with two empty tabs is the most reliable way to fail this case.
Why is everything an enterprise value in this case rather than a price per share?
Because Alderpoint is private and founder-controlled. There are no shares outstanding in a public sense, no market price, and therefore nothing to compute a premium against — the unaffected price analysis, the 52-week range and the premiums-paid methodology that anchor a public take-private case simply have no input here. So the football field is drawn in enterprise value, and the work that makes it meaningful to the family is the bridge: subtract debt, add cash to reach equity value, subtract estimated transaction expenses to reach net proceeds, then split those proceeds across the 76.0% family holding, the 14.0% minority investor and the 10.0% held by management and employees. Hold the expense assumption constant across the range so the process options remain comparable.
Why does it matter whether a bidder is a strategic buyer or a financial sponsor?
Because they are constrained by different things and therefore clear at different prices. A sponsor's maximum is solved: leverage struck on EBITDA, the cost of that debt, the cash generated over the hold, an exit multiple and a required return. Change the return hurdle and the maximum moves mechanically. A strategic buyer is not bounded that way — it underwrites a synergy case and a competitive rationale, and it can pay through a sponsor's ceiling without breaking anything. That is why the precedent set has to be split by acquirer type rather than run as one median, and why a buyer universe treated as a single pool produces an ability-to-pay number that describes nobody actually at the table.
There is already an unsolicited offer on the table. Why not just take it?
Because an unsolicited indication to a private seller with no competing bidder is an opening number, and the case gives you the evidence to test it rather than accept it. The work is to place that indication against the trading comparables, against what control of similar businesses has actually cost, against the acquirer's own recent behavior in this sector, and against what a financial buyer could pay without any synergies at all. Then compare the process options on expected clearing value net of the same transaction expenses, and quantify what a pre-emptive negotiation gives up against what it saves in weeks and leakage risk. The right answer is whatever that comparison supports — but it has to be a comparison, and it has to carry conditions about sequencing, timetable and how the approaching party is handled.
About This Sell-Side M&A / Process Launch Case Study
Sell-Side M&A / Process Launch case study for investment banking interviews. 120-minute format covering preliminary valuation framework, buyer universe segmentation, process breadth decision framework. Includes the full prompt, a model answer deck, a tied-out Excel model and an audio walkthrough.
This case study sits in Investment Banking, under Mergers & Acquisitions. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
120-Minute Format
The time limit a real assessment would give you
Answer Deck
Included in the model answer
Excel Model
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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