Due Diligence

Know what you’re buying. Whether it’s a cross-border merger of industry giants, the integration of a small business operating in an adjacent market or a potential joint venture, you have a responsibility to validate your assumptions, and to ensure a deep understanding of the opportunities and risks and the implications for value, before the deal goes through. The stakes are too high to simply rely on the target company’s claims.

An important part of any due diligence investigation is to examine the strategic fit. What’s the target company’s market like? Competitive position? Potential to affect the value of your overall enterprise? The answers to these and other questions demand primary qualitative and quantitative research into the business under consideration.

How we help

We can help you with any part of your due diligence strategy. For example, we can:

  • Evaluate the attractiveness of the target market, including in these areas:
    • Market development
    • Product mix, pricing and distribution channels
    • The regulatory environment
    • Customer perceptions and demand
  • Analyze the target company’s competitive position in areas such as these:
    • Entry and exit barriers
    • Competitive dynamics
    • Product innovation and performance
    • Marketing and sales performance
  • Identify key opportunities for revenue enhancement and cost reduction
  • Validate the target company’s business plan, including top-line revenue and operational margin
  • Assess potential risks of market concentration or similar regulatory issues (antitrust, Competition Commission in the UK, ACCC, etc.)
  • Forecast opportunities using a series of market scenarios to quantify how market changes could impact a deal’s value
  • Assess risks and rewards to deepen the understanding of market variables
  • Provide relevant research before completing any transaction

Your benefits

  • Proprietary insight into the perspectives of key customers, suppliers and competitors
  • Advance knowledge of key issues with the target company
  • Assumptions and variables that have been tested and quantified

Examples of our work

  • L.E.K. performed due diligence of a rubber and plastic company with a significant China presence, including market and growth opportunities for the company. We validated the investment plan and identified opportunities for improvement in quality control and production optimization.
  • A private equity (PE) company requested a commercial due diligence of a major specialty building products materials company. Read more
  • A PE firm and its portfolio company were evaluating growth options available to the portfolio company, which included the potential acquisition of a logistics company focused on the supply of proppant (frac sand) to oil field service companies. The portfolio company and its owners believed that there were potential synergies associated with a combination of the portfolio company and the target. Read more

Actionable insights borne out of deep, in-market experience in the world’s major industries.

Learn about how we can help you with your M&A needs.