M&A due diligence

Due diligence is an essential part of any M&A transaction. However, far too often the buyer focusses solely on identifying financial and legal risk and relegates business and operational aspects to a high-level health check. Part of the reason for this is that the advisors hired to lead the due diligence process typically do not have the required level of detailed operational or supply chain knowledge.

The deal context could be consolidation within the logistics industry, a manufacturer acquiring a competitor or a private equity fund considering an investment into manufacturing, retail or supply chain. The scale could be as wide as the recent abortive UPS acquisition of TNT or a single country investment. However, the success of each transaction, whether measured financially by IRR, or in terms of potential service and cost benefits, depends to a great extent on operational factors which sit below the radar of strategic M&A advisors. Typical examples could include:

  • The impact on supply chain costs of differing product portfolios or supply chain strategies, and the cost and difficulty to align
  • The current capacity of buyer and seller’s distribution networks, and whether high-level assessments of scale benefits can actually be delivered
  • Verifying whether the status of strategic supply chain projects is as presented by the seller
  • The commercial risks linked to key customer or supplier contracts, and the opportunities for improvement

Graphene Partners brings its significant operational experience to support either the buyer or their advisors. We perform detailed, structured and thorough operational due diligence to ensure buyers are made fully aware of business, operational and commercial risks and issues, and can support in developing plans for their mitigation.

Having participated in deals worth almost half a billion EUR, on both buy and sell sides, we are well versed in M&A and work frequently with some of the world’s largest private equity investors and their portfolio companies.