JBR performs commercial due diligence for family office
Together with the client, the most relevant commercial due diligence research questions were determined for making the investment decision. The consultancy was done by: Merijn Veltkamp
JBR was approached by a Dutch Family Office to perform a Commercial Due-Dilligence (CDD) prior to the decision to acquire a majority stake in a packaging company. Specifically, JBR's advice concerned the validity of the commercial assumptions in the business plan, the valuation multiple and an analysis of a number of potential make-or-break issues, so-called red-flag issues.
The client is a Dutch Family Office with a focus on maritime services. Through acquisitions and joint ventures, the client has built an international portfolio in this segment. The client had obtained exclusivity to take a majority stake in a company specializing in the packaging of raw materials.
Before making a final investment decision, the client needed to have a number of key issues researched. In the past, the acquisition candidate was particularly specialized in the packaging of a specific raw material. However, maintaining the focus on this specific segment did not give sufficient growth potential and did not fit the strategy of the Dutch Family Office. The acquisition candidate had initiated a diversification strategy. However, the status of the diversification and its future potential in combination with the company's technology was still unclear. Furthermore, the acquisition candidate had outlined ambitious growth projections and valuation multiples whose overall feasibility needed to be investigated.
Together with the client, the most relevant CDD research questions were determined for making the investment decision. These topics were structured in a red-flag report. Through market research, external and internal analyses and interviews, they were examined and potential issues were identified. Specifically, growth and diversification projections were validated using analysis of historical data and acquired knowledge about the organization and the market.
Supplementary to the CDD, a multiple analysis was performed to advise the client on the market conformity of the bid.
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