industry tailored solutions Private equity due diligence

GUT FEELING IS SO LAST CENTURY.

THAT STATEMENT GOES A LONG WAY TOWARD EXPLAINING WHY SO MANY COMPANIES HAVE MADE SO MANY ACQUISITIONS THAT HAVE PRODUCED SO LITTLE VALUE.

We at Strategy Labs are working with mid-sized private equity funds to help making informed fact-based decisions in the buy-side situations. We offer business due diligence services of potential targets, as well as carry out a quick diagnostics of existing portfolio companies.

Business due diligence

Objective of a business due diligence is to review strategic reasoning of a potential acquisition, as well as identify post acquisition cost saving and revenue-increasing opportunities. More often than not business due diligence uncovers significant drivers that affect valuation, and hence – the price of the target.

A comprehensive due diligence will answer the following questions:

  • What are we really buying?
  • What is the real value of the target?
  • What synergies can be achieved?
  • What are the risks, the market, and the competitor landscape?
  • Is the target exactly what it says in the sales pitch?

To get to these answers, we deep dive below financial statements and public information: we interview employees, management, competitors or clients, we test your products, we challenge assumptions and look for flaws in business logic.

No wonder our results so far have been unexpected: we have helped our clients to negotiate millions in acquisition price, as well as raised red flags that would not otherwise be visible. In the past we have seen some deals being cancelled, as well as renegotiated significantly better acquisition terms for our clients.

Diagnostics

Operational diagnostic will aim to evaluate current business situation and identify a set of actions to improve status quo. We go beyond the opinion of management team to challenge established truths about the current and potential performance of a company. In operational diagnostics case we will deep dive on cost structure and organizational performance, to identify quick wins.

In general we focus on the following questions:

  • What are cost cutting opportunities?
  • What are revenue increasing opportunities?
  • What initiatives should be launched to capture these opportunities?

We will deep dive below the surface of financial and management reports to get to the real essence of your portfolio business.

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  • 7 NUMBER OF TARGETS THAT WE REVIEWED IN 2012, ALLOWING OUR CLIENTS TO MAKE SIGNIFICANTLY IMPROVED DECISIONS

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