CRA’s Tiago Duarte-Silva provided damages and valuation analysis in an ICC arbitration concerning the failed acquisition of a pulp and paper company, with claims exceeding $2 billion.
The work addressed several alleged consequences of the delayed transaction, including delayed expansion profits, changes in asset value, increased forestry and construction costs, lost logistics savings, delayed operating improvements, and the effect of forced illiquidity and delayed access to transaction proceeds.
Dr. Duarte-Silva and his team developed and tested transaction and operating models under alternative delay scenarios. The analysis addressed industry-specific factors including pulp prices, wood and forestry costs, production capacity creep, long-term productivity improvements, capital expenditures, logistics facilities, and the timing of a major mill expansion. The team also estimated the company’s weighted average cost of capital at two alleged dates of harm, and worked with an external expert on an empirical study of control premiums to assess minority discounts in the country where the matter occurred. The work required extensive collection of data, data cleaning, and analysis in several programming languages. The matter settled.
