Commercial Due Diligence: Project Plastico
Advising PE company during acquisition process in the automotive parts industry
Issue
Our client, a Czech PE company entered in discussion with a potential target in unfamiliar industry and desired independent view on the company.
Our task was to understand the target’s risk (market risks and growth hypothesis execution risks) and sustainability of the company’s margins.
Our scope included
- Market review
- Company review
- Competition review
- Business plan assessment
Time
5 weeks
Our approach
- Hypothesis creation for a further validation giving a clear purpose to the exercise
- Data gathering for further analysis including
- Desk research from the publicly available and private sources understanding the economic and industry fundamentals
- Management interviews, production site visits and company data to understand capabilities and gaps in the organisation that will translate to above- or below-market growth
- Thoroughly interviewing other players in the market including suppliers, customers, competitors and associations
- Synthesis and data triangulation providing reliable and actionable information on market dynamics and trends, customer relationship and competitive position
- Independent assessment of the target’s proposed business plan using the available data
Outcome
- A comprehensive report synthesizing all the gathered information, including business plan review and pointing out the main findings / red flags was provided to the client for its investment decision
