Project case:
Market / Commercial Due Diligence
Objective
This example refers to a market due diligence of a mid-sized manufacturer for special textiles (world market leader). From the seller's point of view, the target company operates in a stagnating but stable market. High upside potentials for the investor in the area of technical textiles are identified, which has hardly been served so far.
Approach by EbelHofer Consultants
First, the inside-out perspective is determined by reviewing all available internal information (e.g. data room). This is accompanied by several rounds of discussions with the management. The findings are then reviewed:
- on the basis of a reliable outside-in perspective on the target company and the current core business.
- on the basis of the potential growth market and extensive interviews (interview partners: market experts, direct clients/processors of the specialty textiles, end clients, exhibition participants, etc.).
Subsequently, the following findings are derived:
- future development of the relevant markets,
- existing or expected dependencies on specific products, clients, suppliers or raw materials,
- past and future competitive positioning, sales and pricing performance,
- sustainable competitive advantages of the target company in current and future markets.
Result
The target company has a stable core business with clear unique selling points, despite the stagnating market. A positive aspect is the confirmation of significant growth potential in the technical textiles sector. However, significant investments in the sales area are essential to leverage the potential. A top-line business case for the next 5 years is handed over to the private equity investor.
