ma

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.