Targeted Buy-side Commercial Due Diligence
The Challenge
Tower Strategy Group’s client, a multi-industry manufacturer was carefully considering an acquisition to grow one of its core businesses. With a complementary product set, the target represented strong potential to horizontally integrate within the client’s markets. And with a competitive bidding process underway, the client wanted to make certain that it priced its offer correctly – wary of overpaying in the midst of “deal fever.”
The Solution
Leaning on our commercial due diligence capability, including our voice of the customer and competitive intelligence services, Tower Strategy:
Gained a solid understanding of target’s stated position within the market as well as the focus and intent of its commercial and innovation plans
Mapped the basis of share and profitability within the target’s markets
Identified whether and to what degree the target was well positioned relative to those share and profitability drivers
Today as well as in the mid- to long-term
Evaluated whether and to what degree that positioning differed between target’s legacy and more recently commercialized product lines
As well as key variances based on the target’s primary customer segments
Based on the above, evaluated whether and to what degree target represented an attractive opportunity for client
Impact
Based on our due diligence work, the client uncovered specific performance gaps at the target. Ones that would require years (due to the NPD opportunity) rather than months to close. Facts which contradicted the target’s management team’s assumptions. As a result, our client was able to reset its own assumptions about the target’s value and reframe its bid, helping ensure it would not overestimate upside and, therefore its bid price.
