Project Corranmore — Out-of-Home Advertising Fairness Opinion
A 1.5-hour Media / Cross-Border Going-Private Fairness case study with a complete model answer
Modeled After
Kroll
A cross-border going-private fairness opinion built as a three-page comparables sequence — financial metrics, then valuation multiples, then implied multiples summary — with percentile ranking tables screening the peer set, premiums screened to going-private deals, precedents demoted to the appendix, and a three-page assumptions and limiting conditions section
Structure and exhibit set are modeled after Kroll. The company, the financials and every figure in this case are entirely our own.
The Situation
Corranmore Transit Media Limited (NYSE American: CRRM) sells out-of-home advertising in Australia and New Zealand: transit concessions with metropolitan transport authorities, street furniture contracts with municipalities, and retail and airport inventory. The holding company is a Bermuda exempted company, the accounts are kept in Australian dollars, and the shares trade in the United States as American Depositary Shares, each representing five ordinary shares.
Corranmore Transit Media Limited
- Sector
- Out-of-home advertising — transit concessions with metropolitan transport authorities, street furniture contracts with municipalities, and retail and airport inventory, sold as advertising faces that earn only when they are sold
- Size
- Geography
- Bermuda exempted company; transit, street furniture, retail and airport inventory in Australia and New Zealand; accounts kept in Australian dollars; American Depositary Shares listed in the United States on NYSE American at five ordinary shares per depositary share
- Ownership
- Situation
The Prompt
You are the financial advisor to the Special Committee of the Board of Directors of Corranmore Transit Media Limited. 00 per American Depositary Share in cash.
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 90 minutes.
PART 1
Decide what earnings your multiples are struck on, and write down why
PART 2
Build revenue out of the panel estate, not out of a growth rate
PART 3
Unlevered free cash flow, with capital expenditure out of the fleet
PART 4
A cost of capital built in the currency the cash flows are earned in
PART 5
A terminal value that answers the question the expiry schedule asks
PART 6
Screen the companies, rank the subject, then draw a range
PART 7
Screen the transactions twice, for two different analyses
PART 8
One equity bridge, the range of implied values, and the opinion
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
Write down what the deliverable is before you build anything
- 02
Settle the earnings base first, because everything downstream is a ratio to it
- 03
Build the estate before the revenue
- 04
Take the concession expiry schedule seriously
- 05
Rank before you range
- 06
Decide what each analysis can carry, and show the decision
- 07
Say what the width of each range is made of
- 08
Write the limiting conditions as claims about this engagement
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
Fairness opinion
An opinion, addressed to a board or a committee of it, that the consideration to be received in a transaction is fair from a financial point of view to a stated group of holders. It is narrow: it does not say the price is the highest obtainable, it does not recommend a vote, it does not address the merits of the transaction against alternatives, and it does not opine on the price at which a security will trade. It is supported by defined methodologies each producing a RANGE, displayed against the consideration, and the judgment it exists to supply is which of those ranges the opinion is drawn on and why — not the average of their midpoints.
The earnings base a multiple is struck on
Any valuation running off an earnings multiple has to state what is inside the earnings, on both sides of the ratio. The trap in a going-private is that a target can produce a pro forma figure adding back the costs of being listed, which are real and which the buyer will not incur, while every company in the comparison set is itself listed and quoted on earnings struck after its own such costs. Applying a multiple derived from that set to a base with those costs removed is not comparing like with like, and it credits the seller's shareholders with a saving that exists only in the buyer's hands.
Held for sale, and discontinued operations
A business under a binding agreement to sell is presented separately: its result leaves continuing operations and its expected net proceeds are an asset that has not arrived yet. There are exactly two coherent treatments in a valuation — strike the multiple on continuing earnings and add the net proceeds in the equity bridge, or strike it on total group earnings and add nothing — and one very common incoherent one, which is to do both. The two errors point in opposite directions, which is what makes them worth pricing rather than warning about.
Digital conversion in out-of-home advertising
Converting a static advertising face to a digital one multiplies what that face earns, because a digital face carries several advertisers in rotation and can be sold by daypart. It also costs capital, carries a replacement cycle measured in years rather than decades, and is rationed by the municipal permits and site consents that govern what may be installed where. In a business whose total face count cannot grow without permits, conversion is the only growth lever there is — which makes the digital share of the estate, and the capital available to raise it, the two things a multiple in this sector is actually sensitive to.
Concession, permit and ground lease tenure
An out-of-home operator rarely owns the sites it advertises on. It holds them under concessions granted by transport authorities and municipalities, under municipal permits, and under ground leases with private owners, each for a fixed term and each re-tendered or renegotiated at expiry. The weighted average remaining term of that portfolio is the structural risk a buyer is really underwriting: a business earning a high margin on short-dated tenure is one whose rent has not yet been repriced, and a terminal value struck as a perpetuity on the last forecast year assumes an outcome the tender record may not support.
Minimum annual guarantee
A concession is typically priced as the greater of a fixed minimum annual guarantee and a share of the revenue earned on the inventory. In good years the revenue share binds and the concession behaves like a variable cost; in bad years the guarantee binds and it behaves like rent. That asymmetry is the sector's operating leverage and it runs hard in both directions, so a model that replaces the greater-of with a flat percentage has removed the only downside mechanic the business has.
Percentile ranking of the subject
The step between computing a peer set's statistics and applying one of them. Rather than reaching for the median, the analyst locates the subject inside the surviving set on each metric that prices it and then chooses the part of the range that position supports. It makes the applied range falsifiable — a reader can disagree with where the subject was placed — and it protects against the commonest failure in a comparable companies analysis, which is applying a central statistic to a company that is not central on anything.
Premiums paid analysis
A comparison of the offer price against the target's unaffected trading price, benchmarked to premiums paid in comparable transactions. Its limit is that a premium is a statistic about a PRICE rather than a valuation: it values the market's view of the company plus a number borrowed from other companies' negotiations. Screening matters more than usual — the premium paid in a going-private where management is on the buy side is a different statistic from a premium paid in a competitive third-party sale — and the sample often splits on whether a market check was run, which is a finding available from one extra column.
Assumptions, qualifications and limiting conditions
The section of a fairness opinion stating what was relied upon and not independently verified, what was assumed, what the opinion addresses and what it does not. It is part of the opinion rather than boilerplate attached to it: it is the boundary of what the opinion can be read to mean, and a reader who ignores it will read the opinion as saying more than it does. The test of a good one is whether it could be attached to a different engagement without changing a word — if it could, it is telling the reader nothing.
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
- —Three-stage comparable company build
- —Percentile ranking tables
- —Premiums screened to going-private transactions
- —Adjusted EBITDA excluding public company costs
- —Per-depositary-share valuation
- —Assumptions, qualifications and limiting conditions
Answer Deck
Full model answer, banker-formatted
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 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 Corranmore — Out-of-Home Advertising Fairness Opinion
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
What is an out-of-home advertising fairness opinion case study in an investment banking interview?
It is a special committee exercise in which a financial sponsor proposes to take a listed out-of-home advertising business private, with members of management rolling over. The candidate is asked for an opinion — supported by a range of implied values — on whether the agreed consideration is fair, from a financial point of view, to the holders other than the buyer group. What is graded is whether the candidate settles the earnings base before striking any multiple, builds revenue out of a physical panel estate rather than a growth rate, takes the concession expiry profile seriously in the terminal value, and says which methodologies the range is drawn on and which are only shown.
Should you add back public company costs before applying a peer multiple?
Almost never, and the reason is a property of the comparison rather than a view about the costs. A selected-company multiple is an enterprise value divided by that company's published earnings, and every company in the set is itself listed and carrying its own listing fees, audit, insurance and investor relations. Applying a multiple derived from that set to a base from which those costs have been stripped is not comparing like with like: it charges the selling shareholders for a saving the comparison does not contain. The saving is real and it belongs to the buyer. Disclose what it would be worth at your applied range, so the committee can see exactly what it is declining to credit, and do not put it in the range.
How do you value a business whose contracts expire?
Not with an unadjusted perpetuity. If the weighted average remaining term of the contract portfolio is materially shorter than forever — which for transit and street furniture concessions it usually is — then a terminal value struck on the last forecast year assumes every one of those contracts renews on today's terms. The disciplined approach is to derive an adjustment from the disclosure you have: the expiry schedule year by year, the average term a re-tendered contract is re-let for, and the operator's own historical record of what it retains at tender. Deriving it makes the assumption arguable; asserting a haircut makes it a matter of taste.
What is the difference between a premiums paid analysis and a precedent transactions analysis?
A precedent transactions analysis applies multiples paid for comparable businesses to the subject's own earnings, so it is a valuation. A premiums paid analysis applies premiums paid in comparable transactions to the subject's own unaffected trading price, so it is a statistic about a price: it values what the market thought the company was worth, plus a number borrowed from other companies' negotiations. Both are screened, but on different criteria — one on what the target does, the other on how the transaction was structured — and treating them as one exhibit produces a set that is comparable on neither axis.
How many valuation methodologies should a 90-minute fairness opinion carry?
Fewer, done properly, beats gesturing at all of them. A conventional fairness opinion shows four, and four cannot be built in 90 minutes alongside a presentation. The professional answer is to decide which two your range will actually be drawn on, run the others as screens whose output is shown and explicitly given no weight, and say in the materials what was left out and why. Naming what a document does not contain is worth more than adding one more exhibit that had no time to be right — and a reviewer can tell the difference between a scoping decision and an omission.
Why does the range matter more than the midpoint in a fairness opinion?
Because the midpoint is an artifact of the range's construction and the range is the evidence. A fairness opinion that averages four midpoints without saying so has replaced a judgment with an arithmetic mean of four other judgments, none of which is stated. What a committee needs is the width of each range and what makes it that wide: whether it reflects a genuine spread in the comparison set, or a convention like a plus-or-minus fifty basis point bracket, or a disagreement about a fact nobody can observe. When two drivers move a valuation by comparable amounts and only one is observable, that tells the committee which methodology can carry an opinion and which can only corroborate one.
About This Media / Cross-Border Going-Private Fairness Case Study
Media / Cross-Border Going-Private Fairness case study for investment banking interviews. 90-minute format covering three-stage comparable company build, percentile ranking tables, premiums screened to going-private transactions. 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 Media & Telecom. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
90-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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