Altisource Portfolio Solutions S.A. (ASPS)

CONSULTING TEAM ASSESSMENT

Grading Checklist

Presentation (150 points)

1. Organization of presentation

2. Voice quality and Pace

3. Mannerisms & Body Language

4. Professionalism

5. Rapport with Audience and Effective use of Media

6. Effective Q&A

Written Plan (50 points)

1. Executive summary

2. Organization of report

3. Writing

4. Appropriate use of tables and figures

5. Use of references

Research Content (200 points)

1. Problem understanding/project framing

2. Appropriate scope of analysis (General Env, Industry, Internal)

3. Effective application of Course Tools/Terminology Frameworks

4. Quality of Recommendations

(Peer Evaluations * Totals = Individual grades)

Sample

Introduction

As a major U.S. conglomerate holding company, your firm, International Everything, Inc. (IE), hired our team of consultants to assist you in assessing a possible acquisition in order to diversify your business portfolio. From our understanding, your company’s twenty-five billion dollars in revenue is currently divided into three sectors: commodity industrial equipment products, energy (oil and gas), and business and consulting services. You have asked us to help you identify the next company you will acquire in order to expand your business and develop your growth strategy further.

After meeting with your team, we have established several criteria in order to find the company that will fit perfectly with your current portfolio. As your team suggested, we excluded the agriculture and mining industry. Instead, we centered our research around the well-recognized, definable, and growing, oil and gas industry. The fact that you are already familiar with this sector by being a major supplier of off-site design and engineering expertise to exploration, extraction, and processing energy firms, led us to this conclusion. As your management team mentioned, acquiring a firm related to your current business “will yield operating and managerial synergism that can free up additional cash flow.” In fact, we believe a vertical acquisition will benefit you the most as we are expecting a marginal increase to be between 8 and 12 percent. With the $5.5 billion budget you allocated to this acquisition, we focused on a domestic and publicly traded firm. We also looked for a solid management and leadership team, as IE is a holding company that does not directly manage its businesses.

Exterran Holdings, Inc. (EXH) is the company we believe you should acquire as it meets all your requirements and will most certainly be a great addition to your business portfolio. Exterran provides operations, maintenance, service, and equipment for oil and natural gas production, treatment, storage, and transportation. It covers a very broad spectrum of clients from national oil companies to independent producers and distributors. Since its creation in 2007, Exterran has become a leader in the oil and gas equipment and services industry and now does business in over 30 countries allowing the company to cover every major oil and gas region in the world. Its corporate headquarters are located in Houston, Texas, and its current President, CEO, and Director, Bradley Childers, is a 20 year old veteran of the oil and energy industry.

This report is designed to explain how Exterran will complement your current businesses and what an asset it represents when added to your portfolio. The report will be divided into five main segments. We will begin by giving you some necessary background information on Exterran. Second, we will evaluate its external environment by analyzing the general environment, the oil and gas equipment and services industry as a whole, and by using Porter’s Five-Forces analysis. Third, we will assess Exterran’s internal environment by providing a detailed summary of the company, exploring its value chain, doing a resource-based view analysis, and evaluating the firm’s performance with its financial ratios and related evaluation. Fourth, a SWOT analysis will give you a better overview of the external and internal environment. Lastly, recommendations and a BCG portfolio analysis will be provided regarding the acquisition of Exterran.

 

I. Exterran Holdings, Inc. – Company Background

Exterran Holdings, Inc. provides operations, maintenance, service, and equipment for oil and natural gas production, treatment, storage, and transportation. This includes equipment and services for hydraulic fracturing, also known as fracking, which is a “process used in nine out of ten natural gas wells in the U.S” (“What is Hydraulic Fracturing?”). The company is headquartered in Houston, Texas, and according to its corporate website, counts more than 10,000 employees as of April 2013, working in over 30 countries. As shown on figure 1, the company’s international presence is very strong, and hard to match. This global strategy allows the company to cover every major oil and gas region in the world.

Fig. 1. Exterran Holdings, Inc. World Locations. Exterran. 2014. Web. 23 Mar. 2014. <http://www.exterran.com/AboutUs/WorldLocations>

Exterran was formed on August 21st, 2007 by the merger of two major firms in the oil and gas industry. Universal Compression Holdings, created in 1954, and Hanover Compressor Company, created in 1990, decided to join forces to reinforce their position as a leader and offer the most diverse combination of offerings. Both companies provided compression services to the oil and gas industry. Indeed, Hanover Compressor was a global market leader in full-service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas production, processing, and transportation applications. Hanover sold and rented equipment as well as provided operation and maintenance services. Universal Compression, on the other hand, offered a full range of contract compression, sales, operations, maintenance, and fabrication services to the natural gas industry worldwide (“Hanover and Universal Merge”). More information can be found in Appendix A regarding this original merger.

Similar to IE, Exterran is a holdings company, which means that “it contains other companies called subsidiaries” (Aldridge) and owns shares of these others companies. As such, Exterran owns an equity interest in Exterran Partners, L.P. (EXLP), which provides natural gas contract operations services to customers throughout the United States (“About Us”). Exterran Partners LP completed the acquisition of compression assets from the Company in April 2013.

Additional detailed information regarding Exterran’s activities, competitive advantages, and performance will be provided in the internal analysis section of this report.

PRESENTATION GRADING RUBRIC

	Below Expectations	Meets Expectations	Exceeds Expectations	TOTAL POINTS
Organization (20 points)	No opening and/or closing statements or irrelevant opening/closing statements. Loses focus more than once. Does not manage time effectively. No logical sequence of information. Mechanistic.	Offers some type of opening and closing statements. Follows logical sequence but structure could be better. May need more elaboration on one or more points. Adequate time management, but could be stronger.	Clear opening and closing statements. Catches audience’s interest, provides overview/conclusion. Follows logical sequence, stays focused, good explanations. Effective time management and strong transitions. Strong mental take away for audience.	________
Voice Quality & Pace (15 points)	Mumbles, mispronounces words, grammatical errors, “umms”. Difficult to understand. Speaks too quietly or too loudly. Speaks too fast or too slow. Loses train of thought, tentative. Lacks enthusiasm.	Easily understood. Speaks loud enough to be heard and at appropriate pace. Some awkward pauses or halting delivery but mostly clear and natural. Could display greater enthusiasm, seem more genuinely interested in own presentation.	Enthusiastic and engaging. Speaks clearly and loudly enough at a comfortable pace. Exudes confidence and interest. No grammatical or pronunciation errors. Presentation appears conversational, extemporaneous, and natural.	________
Mannerisms & Body Language (15 points)	Demonstrates distracting mannerisms which may include bad posture, shifting feet, too much or too little hand movement. Body language reveals reluctance to interact with audience. Seems fearful/very nervous.	No significantly distracting mannerisms. Acceptable posture. Body language mostly demonstrates comfort in interacting with audience but occasional instances of discomfort may be communicated. Seems natural for the most part.	Body language used effectively to maintain audience’s interest. Body language reflects presenter’s reaction to, and empathy with, the audience. Gestures match verbal content, are comfortable and relaxed, seem spontaneous.	________
Professionalism & Appearance (15 points)	Does not meet minimum requirements for business dress. Makes excuses for aspects of the presentation. Inappropriate word choice for audience. Inappropriately informal.	Meets minimum standards for business dress and appearance. Generally treats audience professionally, acceptable word choice (no slang). May seem to lack confidence at times. Reasonably credible.	Dressed appropriately. Appearance engenders respect and credibility. Treats audience professionally. Speaker appears confident and has good command of the topic.	________
Rapport with Audience and Use of Media (20 points)	Does not connect with audience. Little to no eye contact. Reads. Relies heavily on slides and/or notes. Attempts to cover too many slides or lingers too long on too few slides.	Tries to maintain eye contact most of the time but instances may be fleeting in length. Scans the room. Some reliance on notes or slides.	Genuinely connects with audience. Maintains eye contact throughout. Visuals (slides, etc.) effortlessly enhance speech.	________
Q & A (15 points)	Does not answer questions effectively. One members does most of the talking.	Questions are answered satisfactorily. Multiple members are involved.	Excellent answers are provided. Team has a plan for handling questions using topical experts.

WRITTEN PLAN GRADING RUBRIC

	Below Expectations	Meets Expectations	Exceeds Expectations	TOTAL POINTS
Executive Summary (5 points)	Introduction to the paper or an outline is provided. Doesn’t provide summary.	Summarizes some aspects of the paper.	Well written summary providing key highlights of the analysis and recommendations
Writing (15 points)	Several noticeable spelling and grammar errors.	Minimal spelling, grammar and punctuation errors.	Extremely well-written
Tables and Figures (10 points)	Figures and tables are not titled or referenced appropriately.	Appropriate use of figures, tables, and references, etc…	Figures substantiate arguments. Several well-justified references.
Organization (20 points)	No justification for sequence of material. Mechanistic.	Offers some type of opening and closing statements. Follows logical sequence but structure could be better. May need more elaboration in certain areas.	Catches reader’s interest, provides overview/conclusion. Follows logical sequence, stays focused, good explanations. Strong take away.

RESEARCH CONTENT GRADING RUBRIC

	Below Expectations	Meets Expectations	Exceeds Expectations	TOTAL POINTS
Identification of Strategic Issues (25 points)	Simplistic perspective. Some elements are not clearly understood.	Several issues/problems are presented.	Central issues of project are identified and communicated.
Quality of Analysis (120 points)
-Comprehensive scope including General Env, industry and firm levels of analysis	Limited application of tools. Focuses on one issue or limited issues.	Some concepts and tools utilized. Analysis of several aspects of the case is incorporated in the paper.	Extensive use of relevant frameworks and tools following a systematic methodology. Information is provided as means for providing a foundation for recommendations.
-Effective utilization of tools and frameworks	Tools are incorrectly utilized. Lack of understanding of what information is provided.	Appropriate understanding of the purpose and use of tool or framework is provided. A few concepts are misunderstood or need more detail.	Tools are used effectively and professionally. Deep insight behind the purpose of using each tool is gained developing a base of analytical rigor for the paper.
Recommendations (55 points)
-Quality of strategies	Some basic ideas are presented. Not fully thought out or justified. Lack of taking a strong stance.	Solution is presented with some justification for how this solves the scenario problems. Includes some implementation details.	Solution is tied explicitly to project scenario. Is presented as part of a comprehensive, well-thought out plan. Provides important implementation details, including financial impacts.
-Appropriate use of strategy levels and concepts	Some recommendations are provided without applying course concepts	Utilizes some strategy terminology.	All recommendations use appropriate terminology.