Management Case Studies
Due Diligence - Acquisition Assessment
Client: A Fortune 500 Global Industrial Paper Company. Business spans a range of categories.
Business situation: Expansion into adjacent markets was best addressed via a timely acquisition. The challenges were to: (1) assess the strengths of commercial relationships in place between the target acquisition and major customers and; (2) identify market trends, competitive activity, and product dynamics in both the end consumer product and industrial product markets.
Business Need: Management required three in depth assessments to feel comfortable about acquisition economics:
- Market Volumes and Trends globally for the key consumer products using the raw materials.
- Technical Advantages /challenges in the raw material markets by producer, coupled with a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each major competitor.
- Value Equation Offered to Key Customers (consumer products producers) by the target acquisition company.
Why CCC was hired: The client learned that CCC consultants had worked extensively for one of the major customers in the categories using the key raw materials produced by the target acquisition. Without divulging any confidential information, the consultants could help the client characterize the business need areas outlined abovecritically in both technical and commercial terms. CCC consultants Mary Jensen, Mike Jensen and Bruce Stirling assisted the client in a rapid in depth understanding of the raw materials produced by the target acquisition company, the customer relationships with key consumer products companies, the volumes of raw materials and consumer products forecasted globally for the next 2-3 years, and the possible threats, both technically and commercially.
Consulting Project: The overall goal was to give the client enough raw material and consumer market information in a compressed time period to make a successful and financially sound proposal to the target acquisition company. As the CCC consultants had operated in the merger/acquisition arena personally in the target consumer categories, this was right down CCCs alley.
Consulting Outcome: Via face to face presentations and other reporting to client top management and the Board of Directors, the winning proposal was developed. Final negotiations are in process, and a major announcement is expected soon.
