Pragmatic consolidation analysis supported M&A target prioritization
A company had defined an ambitious international growth strategy which leaned heavily on success with the M&A agenda. Pragmatic consolidation analyses were needed to evaluate target companies. M&A activities were kick-started after getting clear priorities from the analysis.
International growth ambitions leaned heavily on success with the M&A agenda
The company had defined growth strategy and their M&A agenda played a critical role in fueling the growth. Management decided to launch a project to assess the match of a handful of potential target companies with their own business and strategy.
Pragmatic consolidation analysis evaluated target companies
Project began by analyzing target companies’ strategies, operations and financials. Operational synergies by function were assessed and initial valuations were made in a pragmatic way just to provide sufficient basis for evaluating EPS contribution, changes in the capital structure and other financial impacts of alternative transactions. Finally, strategic fit was considered and investment rationale described for each of the targets.
M&A activities were kick-started based on clear priorities
The outcome of the work was a firm understanding of the most attractive M&A targets and priorities. The company initiated multiple M&A activities based on the analysis.
Tailormade commercial due diligence
A private equity company had an exclusive investment opportunity at hand. To get a grip of the market they needed to understand market development and the performance of the target company. In a thorough commercial due diligence (CDD) process we were able to shed light on these questions and in the end the PE company decided to make the investment.
There was significant doubt regarding market fundamentals
A private equity company had got its hands on an exclusive opportunity that showed huge promise. But its deal team had some suspicions regarding market fundamentals. The team wondered if the solution that the target offered was as powerful as it seemed. Similar suspicions arose whether market fundamentals were really as favorable as the target had described. A key question for the deal team was if the target, with its unique positioning and approach, could truly be the winner in its market. To shed light on these questions, the deal team enlisted August’s support.
A comprehensive CDD turned every stone to understand the investment
August’s CDD team, in close collaboration with the deal team, made a thorough assessment of the market and value chain where the target operated. We assessed both historical and expected demand for the target’s services in all Nordic countries. With the deal team’s guidance, we analyzed potential risks stemming from technology as this was an integral part of the target’s offering. To evaluate if the target could be the winner in the market, we made a comprehensive analysis in the value chain to understand direct and indirect competition. These analyses shed light on the target’s true potential.
A successful investment and an aggressive start for business planning
The thorough assessment of the markets and competitive landscape were able to find the much needed answers. We were able to confirm (or shoot down) the myths that had baffled the investment team in the beginning. In the end the PE firm decided to go forward with their investment and acquired a majority of target’s shares. The target’s management had been part of the CDD process and after the investment, were able to hit the ground running with the business planning process.
Setting the table for private equity
A private equity (PE) firm’s portfolio company, operating in the restaurant and consumer services market, had conducted a successful turnaround, and was well positioned for accelerated profitable growth. With an updated strategic plan and robust understanding of the market dynamics, the company was all set to continue value creation with the new ownership.
After a successful turnaround, the company was ready for growth
In recent years, the company had successfully conducted a turnaround program and was back on an accelerated growth track. To maintain the good growth momentum and prepare for the upcoming exit process, there was a need to analyze emerging growth opportunities, and choose the most lucrative ones for the company to pursue.
An insightful strategy to create value for the new ownership
August advised the CEO, management team and board in formulating the strategic choices and setting financial targets. To ensure a rapid start in execution, the management team also defined the initiatives and roadmap for generating profitable growth. In addition, August conducted extensive commercial vendor due diligence (CVDD) and market analysis to support the current owner in its exit process.
Company merged with another restaurant company. Investment community’s initial reactions to the merger news highlighted relatively high valuation multiple, but clear sources of synergies. The new merged entity is well positioned for continued value creation in domestic and international markets.
CLIENT CEO TESTIMONIAL
“August’s support in strategy formulation was vital as we prepared for the upcoming exit process. What stands out when working with August is their rigor in handling their responsibilities with the utmost commitment.”