Customized due-diligence program for private-equity client
Private equity

Mid-market private-equity fund enhances its investment process through a dedicated market and operational due-diligence program with Arthur D. Little


Challenge

The client was a mid-market private-equity firm seeking to professionalize its deal-screening approach while actively seeking investments for its second fund.

Approach

The Arthur D. Little team customized its due-diligence program to meet the client's specific needs in a more effective manner.

A dedicated program was created to screen the client’s deal flow with a committed team of senior-level strategy and operations consultants, whose field experience helps generate unique business insight into the diligence process. 

 

Arthur D. Little’s due-diligence program includes:

  • Detailed secondary market research into a wide variety of niche industries, and determination or modeling of market size, market growth, future trends and the target’s market opportunities and threats
  • Structured primary research and interviewing dozens of customers, competitors, suppliers, experts and other industry participants 
  • In-depth company due diligence - strategy, sales, operations, organizational alignment
  • Value enhancement roadmap with quantifiable EBITDA improvements
  • Roadmap of viable exit strategies in 4–5 year horizon
  • Definitive go/no-go recommendation

Value

The dedicated team approach led to approximately 30 deals screened annually and closing on 3 highly successful deals. 
The private-equity client was able to implement immediate sales-growth and EBITDA improvement programs, which were developed as part of our due diligence. 

 

According to the client, the due-diligence program has compressed its holding period from 5 to 3 years, because it can create value in the company immediately upon closing, thus accelerating the exit timeline.