Introduction:

Warburg Pincus is one of the many venture capital investment and consulting firms. It has become apparent after the merger between Lionel I. Pincus and E. M. Warburg and Company. The company intended to acquire Electro Magnetic Geo Services (emgs)from the state oil company which is based in Norway. The Electro Magnetic Geo Services (emgs) owns break through and innovative technology, namely Seabed Logging (SBL), before the process of drilling, it is primarily engagedin finding deep water formations containing hydrocarbons.

There are many technologies which were acquired by companies in order to pursue this process, but they all were less efficient as compared to this technology. For all the companies responsibly engaged in oil drilling procedures, the Seabed Logging (SBL) technology is significantly important,playing a cost effective role and to provide utmost benefits to a number of oil drilling companies.

As there is an intense competition in the market, so in order to give a competitive threat to itscompetitors, emgs secured its technology by patients. The new innovative technology is far more preferable as compared to its competitors because it is quite different from the mainstream oil service providing companies.

For this purpose, the estimated cost required for drilling in deepwaters is between $20 million to $100 million. This technology ensures the presence of hydrocarbons in the deep water formation as well as savingcompaniesfromspending their time and money. On average, the probability of ensuring hydrocarbons presence in the deep water is estimated to be 25% only, but comparatively, the emgs technology would increase this probability to about 90% surely.

Warburg Pincus and emgs The IPO Decision Harvard Case Solution & Analysis

Question # 01

When John Vogelstein arrivedin the calendar year 1976, Warburg Pincus had contemplated to approach venture capital, funding for a growing and new business, in addition to this, it also decided to build afinancial portfolio containing high risk. In exchange, the company would enjoy equity in the startup or the new company.

The amount that the company has investedin venture capital is about 6.4 billion at the end of the year 2006. Moreover, the company has rooted into nine different cities of different countries, and these offices are provide accommodation to 150 professionalsall around the world.

The company’s structure can be viewed as combination of decentralized and centralized, the decision-makingis delegated down and up the hierarchy. The professionals are responsible to analyze the investmentfrom the respective areas in case when investment oriented decisions are crucial for the business in the long run. The executives are involved in the early hour discussion. In addition to this, the senior partners are entitled to put their concern into the decision-making process in consultative way. The deal partners were liable to take final decisions but the investment decision was only taken until the involvement of highly qualified professionals all around the globe through conducting informal conversations and meeting as well in order to have a closer look over the benefits and risk associated with the investment decision.............

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