Case Study 3
Engagement Type: Target Investment Alternatives Analysis
Client Profile: Middle market supplier of transaction automation technologies, operating as an independent business unit inside a multi-billion publicly traded company
The client was experiencing strong performance in the form of exceptional profitabilty termperd by steady market share and modest revenue growth. As a result of the outstanding profitability of the business, the corporate parent mandated more growth from this division, and an acquisition search ensued. The client's management team received a number of offering memoranda that looked interesting. In order to prioritize opportunities and manage their scarce deal-team resources, the client engaged VDC Research to provide its guidance and opinions on a number of acquisition candidates.
"VDC Research teams provide exceptional due diligence support for private equity firms looking for true insight. Their analyses are thoughtful, current and actionable – essential for both us as investor and our management teams."
Paul Barnett, Managing Director
"Our work with VDC Research enabled an efficient, detailed exploration of our investment opportunity, and put our team in an excellent position to work with the management of the company that we eventually partnered with."
8 billion Euro global buyout fund
"VDC Research is able to augment our analysis, provide new perspective, and enhance the deal development process on a number of dimensions."
WestView Capital Advisors
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Core Issue Set
- Based upon extensive primary research and our experience covering the target companies' markets, what is VDC's opinion of the target company?
- What are each of the target's technical strengths? How strong is it's brand recognition and how is it perceived?
- What have each target's partners and customers experienced and how do they rate the target?
- What does VDC think about the combined capabilities and position of the client company and each of the targets?
- What questions would VDC have for each of the target companies' representatives?
- Provide a summary of VDC's syndicated coverage of each target company from the trailing three issues of VDC analysis.
- Develop scenarios of each target's market and how it is expected to evolve during the next 5 years, with a focus on a few key dimensions raised by the offering memorandum, potentially addressable by the client acquiring the target.
- Offer clear, unvarnished views on each specific opportunity from a basis of direct experience and knowledge.
- The client applied the VDC Research analysis diligently, and consulted with the VDC team on a near-continual basis for a number of weeks. Based upon VDC's guidance, the client ultimately determined that an acquisition was not in its strategic or financial interest, withdrew from the acquisition process, and redeployed its resources in other higher-return opportunities.
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