Our client, a European conglomerate of industrial companies, was looking to acquire a fast-growing company, active in the production of commemorative coins for collectors, minted from precious metals (gold, silver, platinum).
Amidst global uncertainty caused by COVID-19, precious metal prices increased significantly in the twelve months preceding our engagement. This inflated the target company’s profitability as it held excess precious metal inventory. Due to the absence of a formal inventory management system, we conducted a detailed assessment of the target’s precious metal inventory. In close collaboration with the acquirer’s metal expert, we calculated the incremental profit caused by precious metal price increases, ultimately helping our client renegotiate the purchase price.
