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…
CDD Plan of Attack: Risk of Overstatement of Digital Disruption Signals (and Opportunity)
The risk of ‘digital disruption’ is pertinent to almost every industry today. Naturally, acquirers look for signals that a target company will be able to brace the oncoming winds of change and enhance its products and services to meet the demands of an increasingly connected and digital world.
Commercial Diligence Tips for Tech-Enabled Service Businesses
Many recent PE deals have targeted businesses that apply technology to help customers streamline processes which have previously been manual and “paper-based.”
A Commercial Due Diligence Perspective on Buyer Power
Everyone will be familiar with the concept of “Buyer Power” as described in Michael Porter’s famous framework. Indeed, almost all commercial due diligence exercises include some examination of TargetCo’s customers’ purchasing power – more specifically, the customers’ ability to apply pressure to lower prices or drive improvements in product (and service) quality, features and…
Strength of Demand vs. Strength of Brand
What is more important when looking at a deal: the strength of demand drivers, or the strength of the target company's brand equity? With rare exception, Demand – not Choice (brand equity among suppliers) – is more fundamental to a successful acquisition outcome.
When Things aren’t Quite what they Seem - Distressing Commercial Due Diligence Close-calls
I thought I’d share some instructive discoveries we’ve had in commercial due diligence recently. I’m curious to hear yours. If you’re inspired, send me a quick reply with a couple of diligence events that surprised you (and that you hopefully caught). Here are a few from the past year: