Operational Due Diligence

Untapping the hidden value

Correctly evaluating the attractiveness of an investment opportunity is a mayor challenge to Corporate and Private Equity investors. Not only identifying the potential upside opportunities of a deal but also the identification of risks are the 2 sides of the Operational Due Diligence coin. 

The 2 important factors for a successful acquisition are market opportunities in order to increase revenue and operational efficiency opportunities to reduce costs.

We believe that too many investors fall head over heels for the market opportunities but fail to see the internal or structural issues that may prevent the company from capturing that growth potential effectively nor efficiently.

Working in conjunction with the acquiring party, we undertake an in-depth assessment of the company’s Value Stream identifying risks, constraints and opportunities for improved operational efficiency. This will allow a more informed short and long term value to be placed on the business.

The assessment can range from a multi-site assessment of Value Streams down to more specific departmental evaluations.

Using our proprietary assessment methodology based upon the 8P Analysis. typically, the operational Due Diligence covers the following areas:-

  • Supply Chain inc. supplier management, transportation, warehousing, planning, procurement, Contingency planning
  • Manufacturing inc. process efficiencies in terms of quality and labour, maintenance
  • Human Resource Management
  • Quality inc. customer, process, supplier and system risks
  • Internal Audit processes inc. financial and Management System

Considerable benefits can be gained by performing an operational due diligence and is well worth the extra effort. However, it does not replace performing a commercial due diligence but should be complementary in order that deals are successful in both the short and long term.

Post-acquisition, assistance can also be given in defining a deployment plan that can be rolled out over a defined timeframe in order to untap all the identified potential in the investment.

Customer profile

Corporate Investors.

Private Equity.

Venture Capital.

Family Office.