workflow-pe-ic-memo

# PE Investment Committee Memo ## What this skill covers Production of a complete, internally consistent IC memo: 9 sections, 10-15 pages, covering the full investment case from company overview through to a clear proceed/pass recommendation. All financial tables must reconcile across sections. ## Workflow ### Section I — Executive Summary (1 page) - Company description: what the business does, size, market position - Deal rationale: why this investment, why now - Key terms: enterprise value, equity cheque, leverage, consideration form - Recommendation: Proceed / Pass / Conditional Proceed - Headline returns: base case IRR and MOIC - Top 3 risks with one-sentence mitigant each ### Section II — Company Overview (1-2 pages) - Products/services, revenue model, customer base - Competitive positioning: market share, differentiation, barriers to entry - Management team: track record, incentive alignment, key-person dependencies - Corporate structure: legal entities, minority interests, JVs ### Section III — Industry and Market (1 page) - Market size and growth (TAM/SAM with source) - Competitive landscape: key players, market share, consolidation trends - Secular tailwinds and headwinds - Regulatory environment and risks ### Section IV — Financial Analysis (2-3 pages) Pull historical data: - Call `fmp_income_statement` with period "annual" and limit 5 - Call `fmp_balance_sheet` with period "annual" and limit 5 - Call `fmp_cash_flow` with period "annual" and limit 5 - Call `fmp_key_metrics` for margin and efficiency ratios Produce: - Revenue and EBITDA bridge (5-year trend, organic vs acquisition) - Quality of earnings: normalised EBITDA vs reported EBITDA, each add-back labelled - Working capital analysis: DSO, DIO, DPO trends and seasonality - Capex: maintenance vs growth, capex intensity (capex/revenue) - FCF conversion: FCF/EBITDA (target >60%) - Call `credit_metrics` for leverage and coverage profile ### Section V — Investment Thesis (1 page) Three to five thesis pillars, each with supporting evidence and quantified EBITDA impact: 1. Revenue growth levers (organic + inorganic) 2. Margin expansion opportunity (cost structure, operating leverage) 3. Market consolidation / buy-and-build platform potential 4. Multiple expansion catalysts (sector re-rating, ESG, profitability) 5. Defensive characteristics (recurring revenue, contractual base) 100-day priorities: 3-5 immediate post-close actions. ### Section VI — Deal Terms and Structure (1 page) - Enterprise value and implied multiples (EV/EBITDA, EV/Revenue, P/E) - Call `sources_uses` for financing table: - Sources: equity, senior secured term loan, second lien, mezzanine, revolver, rollover equity, seller note - Uses: equity purchase price, debt refinancing, transaction fees, cash to balance sheet - Sources must equal Uses exactly - Capital structure: leverage by tranche, blended cost of debt, equity contribution % - Call `debt_schedule` for amortisation profile and cash sweep mechanics - Key legal terms: reps/warranties, indemnities, MAC clause, non-compete ### Section VII — Returns Analysis (1 page) - Call `lbo_model` with entry EV, EBITDA, debt tranches, growth assumptions, exit parameters - Three scenarios (base / upside / downside) with IRR and MOIC each - Return attribution: EBITDA growth + multiple expansion + debt paydown - Call `sensitivity_matrix` varying exit multiple vs EBITDA at exit - Breakeven: minimum EBITDA at exit for 1.0x MOIC ### Section VIII — Risk Factors (1 page) | Risk | Severity | Likelihood | Mitigant | |------|----------|-----------|----------| Categories: market, operational, financial, legal/regulatory, management. Include deal-breaker conditions under which the fund should pass. ### Section IX — Recommendation - Clear verdict: Proceed / Pass / Conditional Proceed - If conditional: specify conditions with owners and deadlines - Next steps: remaining workstreams, timeline, approvals required ## Internal consistency checks - EBITDA in Section I = Section IV = Section VII (exact match) - Sources = Uses in Section VI (to the penny) - Returns in Section I are consistent with Section VII model output - Every risk in Section VIII has a mitigant - Bull and bear cases both presented with equal rigour ## Output format Structured markdown document, 10-15 pages. One H2 per section. Financial tables use the `workflow-xlsx-tabular-conventions` standard (header row, units row, source column, negatives in parentheses). ## Quality gates - [ ] EBITDA consistent across Sections I, IV, VII - [ ] Sources = Uses in Section VI - [ ] All financial data traced to `fmp_*` calls or stated assumptions - [ ] Minimum 3 scenarios (base/upside/downside) in returns analysis - [ ] Every risk has a mitigant; at least one deal-breaker condition stated - [ ] Recommendation is explicit: Proceed / Pass / Conditional ## Related skills - `workflow-pe-returns-analysis` — detailed returns modelling used in Section VII - `workflow-pe-due-diligence` — upstream DD that populates Sections II-IV - `workflow-pe-value-creation-plan` — VCP initiatives that feed Section V thesis pillars - `workflow-xlsx-tabular-conventions` — table formatting for financial schedules