Mergers & Acquisition Due Diligence. A private equity firm considering the acquisition of an oil & gas services company wanted to validate the purchase price, assess management team, effectively measure the marketplace and the target’s position in it, and provide strategic recommendations.
Addressing the organizational and operating model challenges resulting from mid-management gaps
Two core business with different market segments
Confidence in cyclical revenue forecast
Provided a full service approach to assessing the acquisition target including market and stakeholder analysis, finance, HR and IT
Analyzed market conditions and key stakeholders such as suppliers, competitors, and customers through primary and secondary research. Stress-tested forecast.
Prepared full financial schedules to determine quality of earnings
Completed IT audit to determine gaps and alignments with key processes
Completed HR review of senior executives
Provided comprehensive opinion on acquisition target to allow client to make educated decision on a path forward
Impact on client’s business:
Incentica concluded the company had an advantageous revenue and cost model with sticky customer relationships. However, risk was present due to: compliance and health & safety nature of the business, lack of management transition plan, and customer concentration that introduced a multiples gap with the LOI. The transaction was delayed while the target company made changes to address the issues identified during due diligence.