Traditional, Post-LOI Market Diligence

The problem: An excited client was slightly nervous. They were pursuing a proprietary deal in an obscure, niche-y space. Management had no data on the external market dynamics, were unwilling to share customer lists and did not seem to have much insight as to their positioning in the market. With thousands of customers, dozens of competitors, and a relatively insignificant share of a very large market, the business diligence would be critical.

The solution: Acclaro started the process by speaking with the client and management about potential hypotheses, assumptions, presumed opportunities (and threats) that could be tested. We then brainstormed internally about all of the issues we would want to know if we were investing our own money in the deal. Recognizing our capabilities (and limitations), the timeline, and the costs of each research swim lane, we were able to get creative. We conducted multi-disciplinary research design to include quantitative surveys, interviews with industry experts, development of lists of presumed customers and prospects, in-person meetings overseas (and telephone conversations domestically) with assumed customers and prospects, competitor conversations, and supplier interviews – all on a blind basis.

The result: Acclaro was able to confirm most investment hypotheses, plus tee up four potential options for significant strategic growth moving forward. Simply put, the sellers were blind to a number of real, quantifiable opportunities for near-term growth. Needless to say, the study not only convinced the buyers to proceed with the acquisition, it more than paid for itself in terms of future revenue growth.

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