When evaluating a target, investors must answer a range of critical questions — not just about market fit, but about operational readiness and long-term value potential. These include:
- Can the business scale to meet growth objectives, or are there constraints in capacity, systems or talent that could limit upside?
- Is the company operationally healthy, with mature systems, processes and infrastructure?
- Are there hidden risks in technology, supply chain or workforce that aren’t visible in the CIM?
- Do our financial assumptions about cost structure, capex and working capital reflect how the business actually runs?
- What commercial and operational synergies can realistically be captured?
- Are management, investors and operations teams aligned on how to execute the value creation plan post-close?
At L.E.K. Consulting, we’ve led hundreds of commercial and operational due diligence efforts across sectors including consumer, industrials, healthcare, TMT and financial services. Our experience shows that when commercial due diligence (CDD) and operational due diligence (ODD) are conducted together — not as parallel tracks but as one integrated process — the results go beyond the sum of their parts.
Six reasons to integrate CDD and ODD
1. Align strategy with execution
Even the strongest growth strategies can falter without operational readiness. Integrated diligence ensures that market opportunities identified during CDD align with the operational capabilities needed to deliver — capacity, systems, talent and infrastructure. For example, a company might see white space in adjacent markets, but without scalable production or a flexible supply chain, that upside remains hypothetical.
This alignment also acts as a check on operational health, a critical yet often overlooked driver of value. With early surfacing of issues like outdated systems or organizational gaps, integrated diligence helps avoid post-close surprises and sets a stronger foundation for execution.
2. Uncover hidden value
When CDD and ODD are run together, they often reveal opportunities that wouldn’t surface in isolation. Customer interviews might highlight recurring delivery issues, while operational analysis pinpoints the root cause — such as capacity constraints or logistics gaps. In other cases, ODD may uncover advanced capabilities that support premium pricing or expansion into new customer segments. This combined view helps investors see both where value is leaking and where new value can be created.
In a recent client engagement, customer interviews flagged delivery issues that were traced to upstream production bottlenecks. Addressing those constraints led to a 30% increase in throughput and helped prevent a potential 15% revenue loss.
3. Reduce risk
Siloed diligence often misses how risks in one area can compound issues elsewhere. Integrated analysis brings these connections to light — showing how gaps in vendor coverage, outdated IT systems or fragile organizational structures might amplify commercial risks like churn, delayed delivery or margin compression. With a fuller view of risk exposure, investors can plan mitigation strategies earlier and build more realistic valuations.
4. Increase confidence in financial outlook
A joined-up view of commercial and operational data strengthens key inputs to the valuation model. Revenue forecasts can be tied to actual capacity, while cost-to-serve, working capital and capex needs are grounded in how the business operates. That makes EBITDA adjustments and investment requirements more defensible.
5. Gain more comprehensive value uplift post-close
When strategy and operations are aligned from Day 1, buyers can hit the ground running with a more confident 100-day plan. Integration and transformation priorities — such as footprint optimization, pricing changes or supply chain investments — are already pressure tested and agreed on. That early clarity accelerates execution and drives accountability across the portfolio company.
6. Increase deal efficiency and negotiating leverage
Running CDD and ODD as a single integrated project reduces duplication, shortens timelines and minimizes disruption to management. It also strengthens the buyer’s negotiating position. With a fuller view of upside and risk, acquirers can justify adjustments to deal structure — from price to escrows to earnouts — with a clear, data-backed rationale.
Integrated diligence in action
Integrated diligence provides a more complete view of both opportunity and risk. By combining commercial and operational insights, investors can validate key assumptions earlier and develop more realistic, actionable value creation plans.
When diligence efforts are fragmented, post-close strategies can lose momentum. An integrated approach builds alignment early, setting the stage for confident 100-day plans, focused transformation efforts and clear accountability. Beyond diligence, we help clients turn investment theses into practical roadmaps, with a focus on synergy capture, operational improvements and long-term growth.
Contact us to learn how L.E.K.’s integrated diligence approach can help you make smarter investment decisions and drive stronger results after close.
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