Case Study: Due Diligence

Overview and Challenge

• A mid-market private equity firm's acquisition of a shoe polish and insole business required a due diligence report, examination of the supply chain and determination of any potential savings.
• The existing due diligence reports had very little supply chain data, and while additional data was available, it was scattered in a data warehouse with hundreds of documents.
• All analysis had to take place in less than one week.

Tompkins' Role

• Determined the 2009 profit and loss (P&L) statement for this division of the company's business and then analyzed the potential P&L if this division was removed from the company and operated as a standalone business
• Provided detailed analysis of potential areas for cost savings and improved operations margins

The Results

• Positioned the company for a highly informed decision of whether or not to bid on the business division and at what price (relative to the additional investments beyond purchase price) they should separate and improve the business
• Gained an understanding of the total supply chain cost, the magnitude of savings from improvements, and the transitional steps necessary to acquire the business, along with additional insight into the Chinese market

Learn more about Tompkins Associates' services for merger & acquisition strategy, candidate qualification and due diligence.