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Business case

BSDD for a major operator of high-speed train lines

Sub-industry: Rail transport


Our client, a major operator of high-speed train lines, was considering the purchase of two entities that are currently operating high-speed lines in France (through a 25-year partnership contract signed with SNCF Réseau).

Key Takeaway

The profit generated from operating the lines was located in a different entity from the entity that signed the partnership contract with SNCF Réseau (but both entities were supposed to be part of the transaction). Considering the low level of information provided by the seller, the profitability analysis within the frame of the transaction was critical but challenging. Both entities in the transaction scope had several subcontracting contracts with other entities of the group that would become third parties after the acquisition (potential other locations of the contract margin).

Accuracy Role

During our three-week engagement, we performed buy-side due diligence, including a detailed review of the financial terms of the partnership contract: breakdown of the initial investment, sources of remuneration during the operating period and relationships among stakeholders (notably between both entities within the transaction scope).