Commercial Due Diligence
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Stanton Associates can add bandwidth to an investor’s own resources and add strategic and operational expertise as well as fresh insights. We can uncover surprises – both positive and negative.
We can add value in a number of areas, including the following:
- Integrated report on the target’s business operations, products/services, customer relations, sales and marketing effectiveness, and competitive position
- Macro level review of trends affecting future growth. Includes: demographic changes, government regulations, technological changes, industry forces such as consolidation, market expansion or contraction
- Identification of strategic options for a higher rate of growth
- Management team assessment (obviously with a focus on the personnel expected or required to be retained after the transaction closes)
- Financial review (different from accounting due diligence by CPAs) – this focuses on quality of business plans, KPIs, budgets, and other business metrics
- Evaluation of the quality of the company’s methodology to forecast sales, cash flow, and earnings
- Compensation structure especially issues that may be associated with executive and sales incentive compensation plans
- Consideration to the level of difficulty associated with merging, absorbing, or discarding different departments and functional areas after the acquisition
- Review for risk factors affecting purchase price
- Strategic fit - especially where the purchase extends the product lines of the platform company or is intended to open new market opportunities
- Product line analysis and rationalization with a review for impact on marketing, distribution, sales, and other areas that will need to be harmonized
- Culture fit - not something that shows up on the spreadsheets analyzing the deal, but if the target is too far out of alignment it can be a lengthy, expensive process to straighten things out
We recognize that not all these services may be necessary for each acquisition and that others may be. We have the experience and expertise not to be shackled by prescribed checklists. Stanton Associates will bring innovative thinking about the virtues of the deal and its structure, and a critical assessment of the target’s business.
When the investor is out of bandwidth, not able or wanting to be in the field for days digging into details, or simply when it makes sense to get a second opinion, Stanton Associates is the smart choice.