We hope that you enjoy GRAPH Papers® - our ongoing series covering best-practices for assessing market opportunities and conducting commercial due diligence.
The insights behind these short pieces derive from real-world diligence experience. Our aim is to help our team and our clients develop and apply “standard work” methods that lead to better deal outcomes. Some of the tips will apply to specific sectors or types of asset, but we expect that most will be of interest to everyone in the diligence community – given that so much of what determines deal outcomes ties back to business fundamentals.
If you would like to share your thoughts about our ideas, please reach out to us.
Take a look at the topics covered in past GRAPH Papers®.
Diligence Considerations for Healthcare Provider Investments
Private equity interest and deal activity for healthcare providers has certainly accelerated over the past decade. Platform acquisitions are particularly targeted as opportunities for back-office efficiency and revenue growth – and to address pricing power imbalances with the ever-focused payers.
The Importance of Product-Market Fit in Commercial Due Diligence
Globalization, digitalization, information access, and an increasingly discerning customer base have been contributing to a business environment that continues to build in competitive intensity year after year. To survive and thrive, companies must demonstrate meaningful growth that outperforms competitors or displaces incumbents. This growth can take the form of enhancement of existing…
CDD for Tech Implementation & Support Businesses – Spotting the Good, the Bad and the Ugly
Given the massive growth in digitisation, automation and the software markets, investors are pushing ever-increasing amounts in the tech advisor and technology implementation/support partner market. These businesses are subject to the same market growth rates (minimum >10% p.a., many >20% p.a.), but relative to the underlying software businesses they benefit from lower entry multiples…
Understanding Matters…Hospital Medical Technologies: Who Makes the Big Spend Decisions and How Do They Get There?
Most new hospital medical technology purchases hit the capital procurement process. Capital purchasing decisions by hospitals can often be a complex maze of processes that impact the timeliness of consideration and final approval and allocation of funds for procurement. Typically, items above a certain monetary threshold meet the institutional requirement to be vetted through a capital purchasing…
By Nature, it’s the Channel (and a Leading Value Gen Lever)
The Target Co. is playing in a great space (e.g., strong tailwinds, right segment(s), etc.), has product(s) that attract valuable customers, the diligence indicates that the product line is differentiated, and the management team is presenting a very good, if not great, growth case. Unit economics are strong, and the IC can reasonably conclude that this might be a great opportunity. A nice find…
A New Class of Buyers - The Graduation of the Wise Industrial Buyer
As any homeowner knows, the demographics of the “trades” are changing, with an older generation of master tradespeople retiring. Consumers experience this as a lack of qualified service providers. As investors, there is another aspect to this trend that is more important to track – it represents a quiet changing of the guard among industrial customers.
How to Diligence the Risks of SaaS Scope Creep
GRAPH has diligenced many SaaS companies, and as we all witness there is a particular trend towards software companies seeking to build a “complete platform” stemming from an original best-in-breed point solution. In the quest to grow revenues, increase stickiness, drive value, and attract investment, companies are expanding their feature-sets. This scope-creep poses a very real risk of…
COVID-19: How to Prepare a B2(B2)C Business for the ‘New Normal’
COVID-19 has, in just a few months, shaken and radically disrupted governments, economies and societies alike (even the publication of our GRAPH Papers was disrupted – but we are glad to be back at it).
Credit in the time of COVID
Any statement on the level of disruption that 2020 has served up risks being an understatement. In addition to reconsidering personal lives and routines, many investors have been forced to rethink world views on risk and downside – a subject we’ve been spending immense time on over these past 6 months. While GRAPH prides itself on thinking creatively about value gen opportunities for new…