Commercial Due Diligence
When making an acquisition, commercial investors often ponder critical questions such as: Is the industry fundamentally attractive? Does the company have a healthy position in the industry? Do significant value creation opportunities exist? What are some viable exit strategies?
A&M brings an approach to commercial due diligence that generates insights on specific targets or selected industries, and guides private equity professionals in their investment evaluation and underwriting process. Our commercial due diligence program considers these four questions by evaluating:
Industry Attractiveness: A&M considers the size of the addressable market for the company/product; the growth drivers and projections in the addressable market; and the fundamental profitability drivers of the market. We then often build our own detailed market models with projections for the upcoming years.
Positioning of the Target Company: A&M analyzes the drivers of value creation in the industry, differentiating factors for the company and its sustainability.
Value Creation Opportunities: A&M focuses on ways to enhance revenue and reduce cost, opportunities for consolidation or realignment in the industry and implementing operational improvements.
Exit Strategies: A&M assesses the likelihood of attractive exit multiples in the expected holding period and the chances of finding a strategic of financial investor after the expected holding period.
A&M's Commercial Due Diligence program is customized to each client's individual needs and level of intensity. Our commercial due diligence assignments can last anywhere from a few days to several weeks, and are generally driven by a potential closing date or the complexity of a target company.