What price would you pay for the project? What are the key valuation drivers and assumptions that you can change to make Highvale's bid competitive, and should you use them?
What price would you pay for the project? What are the key valuation drivers and assumptions that you can change to make Highvale's bid competitive, and should you use them?
In this two-part case, students take the roles of an infrastructure investor and a project finance lender in the acquisition of a 150MW solar project in Texas.
Case A follows Nicole Baker, a new associate at Highvale Capital, as she prepares a bid for Clear Blue Sky Solar. With one week before the first-round deadline, she must evaluate generation estimates, merchant power price forecasts, operating costs, and technology risks to arrive at an unlevered valuation. Her assumptions will determine the fund's bid and its chances of advancing in a competitive sale process.
Case B shifts to Ben Morris, an investment banker at Kiyoshi Financial Group, asked to finance Highvale's acquisition. Structuring the debt, Ben must decide on loan size, tenor, credit spread, hedging, and lender protections, while managing client relationships, internal committee expectations, and the uncertainties of the merchant power market.
Through a hands-on modeling exercise and strategic analysis, students learn to price risk, align incentives between equity and debt, and build a bankable transaction.
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