Client Success:
Assisted Private Equity Company in Conducting Due Diligence on a $100M Acquisition
Situation:
Pending acquisition required analysis of target as well as greater market dynamics
US private equity firm looking to add a portfolio company in the construction industry required due diligence to examine the uncertain/cyclical nature of the company’s sales
Additional need existed to examine the company set to be acquired in great depth
Complication:
Uncertain market dynamics and increased competition
The construction industry was still recovering from recession and, while it projected growth in coming years, uncertainty was still high
Big box retailers were beginning to sell at enterprise level and cut into margins of smaller B2B sellers of construction materials
Solution:
We developed recommendations on whether acquiring the target was a sound decision based on company research and market insight
We conducted over 100 in depth interviews with employees at all levels of acquisition target
The acquisition ultimately went through with our client having transparency about its acquisition and the greater construction market dynamics
The Private Equity firm exited the acquisition successfully later in the economic cycle, and has even begun intentionally acquiring in cyclical industries now that they know how to distinguish cyclical downturns in revenue from true losses of customers.