Introduction
At Everest Assets Group (EAG), our acquisition strategy focuses on unlocking hidden value within underperforming IT and cybersecurity firms by recognising off-book assets. These assets often include intellectual property (IP), real estate, long-term contracts, and work-in-progress. Through our proven methodology, developed over years of providing advisory services to UK firms, we have consistently demonstrated significant growth in Net Asset Value (NAV). On average, this approach has delivered a 1,400% increase in extant NAV for each firm.
An integral part of this strategy is to increase the NAV within each acquired firm to contribute towards a strong consolidated NAV for the EAG Group at the time of the Initial Public Offering (IPO). The Share Price Multiplier (SPM), which is a key factor in determining market capitalisation, is largely based on NAV at the time of the IPO. As of now, the SPM is x33, with a 10-year average of x22. By leveraging this multiplier, EAG forecasts achieving a £10.5 billion market capitalisation with an anticipated NAV of £400 million by the time of the IPO in 2028-29.
This white paper outlines the impact of these NAV increases on EAG’s credit ratings, how they contribute to overall financial stability, and the path to achieving a £10.5 billion market cap through strategic acquisitions.
Projected NAV Growth per Acquisition
EAG’s acquisition model hinges on identifying firms whose balance sheets do not accurately reflect their true asset base. Through strategic application of accounting standards, such as IFRS, we ensure that off-book assets are properly recognised on the balance sheet, leading to substantial growth in NAV.
1. Expected NAV Growth:
Pre-Acquisition NAV: Typically understated due to incomplete asset recognition. Many firms fail to account for assets such as long-term contracts, intellectual property, and real estate, undervaluing their true worth.
Post-Acquisition NAV: Following our comprehensive asset recognition process, we expect a 1,400% increase in NAV for each acquired firm. This projection is based on historical data from prior advisory work with UK firms, where we consistently achieved such increases by bringing hidden value to light.
Immediate Impact: This substantial NAV increase will not only strengthen the balance sheets of the acquired firms but also improve the consolidated NAV of EAG as a whole. This is a critical element of our strategy, as the NAV across all acquired firms contributes to the consolidated NAV at the time of the IPO, ultimately determining the SPM and, by extension, the market capitalisation.
Credit Rating Improvement
A significant increase in NAV will have a direct, positive effect on EAG’s credit ratings across major rating agencies, enabling the company to secure lower-cost financing and improve overall financial stability. Here’s how our expected NAV growth translates into improved credit scores:
2. Credit Rating Agencies & Impact:
Dun & Bradstreet (D&B):
Financial Strength Score: D&B focuses on balance sheet analysis. A 1,400% increase in NAV will significantly reduce financial stress, as the company will demonstrate much stronger asset backing.
Expected Improvement: EAG anticipates a rise from a mid-tier risk category to the lowest risk category, enabling access to more favourable borrowing terms and expanding our financial options.
Moody’s Investor Services:
Investment-Grade Ratings: Moody’s evaluates a company’s ability to meet its financial obligations. By increasing NAV and improving EBITDA, we expect our credit outlook to shift from Baa (moderate risk) to A (investment-grade status).
Expected Improvement: EAG forecasts moving from Baa2 to A3, reflecting a stronger capacity to service debt and reducing overall financial risk.
Standard & Poor’s (S&P):
Long-Term Creditworthiness: S&P evaluates both tangible and intangible assets when assigning credit ratings. A 1,400% increase in NAV will enhance EAG’s asset-backed creditworthiness, positioning the company for higher ratings in terms of borrowing and investment.
Expected Improvement: EAG anticipates improving from BBB (good credit quality) to A- (strong credit quality), further solidifying its reputation as a stable and reliable borrower.
Fitch Group:
Solvency & Stability: Fitch emphasises long-term solvency and operational stability. Recognising previously unreported assets will substantially reduce our risk profile, allowing EAG to achieve lower credit risk ratings.
Expected Improvement: We expect a transition from BBB (moderate credit risk) to A (low credit risk), securing lower-cost capital and greater financial flexibility.
Impact on Financial Stability
Improving credit ratings is only one aspect of our strategy. The ultimate goal of increasing NAV and creditworthiness is to enhance the financial stability of EAG and its portfolio firms. This ensures that, leading up to the IPO, EAG has a robust balance sheet that drives high market capitalisation. The strength of our consolidated NAV at the time of the IPO will directly influence the SPM and our market capitalisation target of £10.5 billion.
3. Financial Stability:
Access to Bank Loans: Improved credit ratings will make it easier for EAG to secure bank loans at favourable interest rates, reducing the cost of capital and enhancing our ability to finance future acquisitions or operational needs.
Expanded Working Capital: By strengthening our balance sheet, EAG will have increased flexibility to expand working capital, which is crucial for funding growth and future acquisitions, particularly in the post-IPO phase.
Liquidity Protection: Improved credit scores and stronger financial fundamentals will protect the company’s liquidity, even during market downturns or potential delays in the IPO process. This ensures that EAG can maintain business continuity and safeguard its long-term operations.
Enhanced Client Perception: A stronger financial foundation will also enhance EAG’s reputation in the market. Improved credit ratings will allow the company and its portfolio firms to compete for larger, more lucrative contracts, increasing their credibility and stability in the eyes of potential clients.
Share Price Multiplier (SPM) and Market Capitalisation
A key driver of EAG’s market capitalisation at the time of the IPO is the Share Price Multiplier (SPM), which is based largely on the NAV at that time. Historically, the 10-year SPM average is x22, but as of writing, the current SPM is x33. Given our forecasted consolidated NAV growth across acquisitions, EAG anticipates leveraging this SPM to achieve a £10.5 billion market capitalisation by the time of the IPO in 2028-29.
This target is built on our ability to continually increase the NAV of each acquired firm, consolidate this growth across the EAG portfolio, and strengthen our overall financial stability through improved credit ratings and effective risk management.
Conclusion
By driving NAV growth of up to 1,400% per acquisition, improving credit ratings, and leveraging the Share Price Multiplier (SPM), EAG is positioning itself for a £10.5 billion market capitalisation by 2028-29. These improvements not only lower the company’s cost of borrowing but also increase its competitiveness, allowing for greater acquisition potential, higher growth opportunities, and stronger operational resilience.
This strategy sets the stage for sustainable growth, ensuring EAG remains financially secure and competitive in a rapidly evolving market landscape, all while creating long-term value for its investors.
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