Business case
Our client, a French sales and marketing solutions provider with private equity backing, had been looking to expand into the Spanish market for some time. After an aborted transaction earlier in the year, they identified one of the last independent players in the market and were in exclusive discussions for its acquisition.
Small targets often require a significant amount of work to obtain consistent financial and analytical information. It is critical to manage client expectations and ensure a high level of transparency to avoid incurring unexpected cost overruns. The high seasonality of the business, with a high dependency on Christmas campaigns, resulted in uncertainty over the achievability of the budget, irrespective of year-to-date performance. Timing the transaction to take this into account could result in significant savings for the client as well as reducing uncertainty.
During our engagement, we performed buy-side due diligence on the historical figures and current trading and assessed the achievability of the budget and business plan. We ultimately recommended postponing the acquisition.