Work Story: Due Diligence Research for a Private Equity Acquisition

In a continuing effort to provide our audience with a better understanding of the type of advisory and consulting assistance that Fletcher&Co. provides, here is the second entry in our Work Stories series highlighting recent client projects.  Actual company names have been made anonymous to protect their confidentiality.

Industry: High-Tech, Electrical Equipment Contractor

Ownership: Privately-held

History: Founded circa 2000

Location: U.S. (East Coast)

Company Scenario:

In mid-2014, our client – we’ll call them PrivateEquityCo – was in the process of acquiring a high-tech, electrical equipment contractor on the East Coast (U.S.).  In this effort, Fletcher&Co. was hired to assist PrivateEquityCo in their acquisition due diligence efforts.

In private equity acquisitions, all information gathering by a prospective buyer is typically at the consent of the seller.  In other words, the seller must agree to share any confidential company information.  The first phase of the project began when I met with the seller at their home office to outline a plan for gathering customer satisfaction data from their top customers.  The plan involved speaking directly with approximately 30 customers at Fortune 500 companies to determine their overall satisfaction level with the contractor.  After spending a day with the CEO of the seller, we gained permission on the due diligence initiative including the scope of the project, the target audience, and the time line.  This was an important milestone, as the CEO could have declined our due diligence research efforts if he had become uncomfortable with any aspect of the process.

Over the course of the next 4 weeks in Phase 2, Fletcher&Co. interviewed by telephone a sampling of top customers to better understand the electrical contractor’s strengths, weaknesses, and general performance in fulfilling their work activities.  At the conclusion of the interview phase, we analyzed the results of the customer interviews and prepared/presented a final report documenting the comprehensive findings.

Outcomes/Deliverables:

The overall customer satisfaction level of the electrical contractor was exceptional.  We identified several key hot buttons in regards to customer needs.  We also learned some important information as it related to future growth opportunities.  The net result of the due diligence initiative was that the customer base of the electrical contractor was on solid ground, and PrivateEquityCo subsequently acquired the electrical equipment contractor following the conclusion of our project.

2016-11-07T05:49:32+00:00

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