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Duff & Phelps Corporation (NYSE:DUF) was incorporated on April 23, 2007. The company is the sole managing member of D&P Acquisitions. Since the company is the sole managing member of D&P Acquisitions the financials of D&P Acquisitions will be combined with company's financials although company holds only 34.5% equity interest (approximately) in D&P Acquisitions.

D&P Acquisitions is the leading provider of independent financial advisory and investment banking services.

  • The Financial Advisory segment provides valuation advisory services, corporate finance consulting services, specialty tax and dispute and legal management consulting services.
  • The Investment Banking segment provides M&A advisory services, transaction opinions and restructuring advisory services.

Revenue

The company generates revenues from financial advisory and investment banking services. It typically enters into these engagements on a time-and-materials basis, a fixed-fee basis or a contingent-fee basis.

Company Outlook

The company outlook is positive due to:

  • Rising M&A activities worldwide due to rising globalization and rising number of multinational companies/corporations.
  • Extensive range of services offered: The company offers a full range of financial advisory services along with M&A and restructuring services. Company provides many of these services through its recently acquired companies ("Chanin Capital Partners LLC" & "Standard & Poor's Corporate Value Consulting"). Cross selling of these services will provided the company with a new growth opportunity as most of these services are related to the high probability of cross selling. Moreover, tax related complex services offered by the company will allow it to attract more clients in other services space.
  • Strong brand name with leading market positions: Duff & Phelps brand is well recognized. Additionally, according to Thomson Financial, in 2006, the company is the number two independent provider of fairness opinions (which we define as excluding investment banks that engage in underwriting, capital markets or lending activities) in the world based on number of opinions delivered, and, according to The Deal, a top ten global provider of restructuring services based on number of assignments.
  • Pure advisory player: The company provides purely advisory services and doesn't include itself in related services like audit or Sarbanes-Oxley Act Section 404 compliance services, public capital raising, trading, underwriting or lending activities.
  • Global presence: Company delivers its services through offices in 21 cities, including six international offices. Its international offices are located in Amsterdam, London, Munich, Paris, Tokyo and Zurich.
  • Its existing relationship with clients.
  • Tougher and ever changing tax law, financial regulations.
  • Successful history of acquisitions.
  • Entry in new markets: The company, through acquisitions ("CVC" September 30, 2005), increases its presence Europe market and very recently in Asian market through a referral agreement with "Shinsei Bank, Limited." Japan.

Negatives

  • Competition is expected to rise.
  • The company had made significant acquisitions in recent past and its success is very much dependent on the success of these acquired companies.
  • The company is a new entrant in the Asia market and its future growth, to some extent, depends on its success in Asia market.
  • The company's success very much depends on its management; loss of any key personnel can effect the company adversely.
  • In the advisory business, reputation and brand value play a very important role; any decline in brand value can hit the company adversely and may result in loss of clients.

Positives


  • Extensive range of services offered
  • Strong brand name with leading market positions
  • Pure advisory player
  • Global presence
  • Tougher and ever changing tax law, financial regulations.
  • Successful history of acquisitions.
  • Healthy balance sheet.
  • Advisory services are particularly tax related and restructuring advice services are less affected by any economic slowdown

Disclosure: This article reflects personal view of the author about the company and one must read offer prospectus and consult its financial adviser before making any investment decision

Source: Outlook Positive For Duff & Phelps Corporation