Business case
Our client, a Dutch science company active in nutrition, health and sustainable living, was considering the acquisition of a Danish firm specialised in the production of human milk oligosaccharides (HMOs) for different applications.
Exclusivity was set to expire during the business plan period, so there was a major risk related to negotiations with other manufacturers, as well as the target’s ability to take advantage of the first-mover role in new generations of HMOs and new applications.
Market forecasts showed significant growth for HMO applications, in line with the seller’s long-term expectations. Furthermore, a number of potential upsides were not considered in the business plan (e.g. regulatory approval in new markets).
We analysed the historical profitability, financial position and cash flows to provide the client with adjusted valuation items. Furthermore, we identified several recommendations for the SPA, scrutinised the business plan and provided our view to support the client in refining its purchase price.