Customised due diligence programme for private equity client

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

Challenge

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

Approach

The Arthur D. Little team customised its due diligence programme to meet the client's specific needs in a more effective manner. A dedicated programme 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 insights in the diligence process.

Arthur D. Little's due diligence programme includes:

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

Value

Dedicated team approach led to approximately 30 deals screened annually and closing on 3 highly successful deals. Private equity client was able to implement immediate sales growth and EBITDA improvement programmes, which were developed as part of our due diligence. According to the client, the due diligence program compresses their holding period from 5 to 3 years, because they can create value in the company immediately upon closing, thus accelerating exit timeline.