Financial and Operational Due Diligence on an Analytics Services Company
Requirement
The Private Equity (PE) arm of a global bank was looking for an investment in the expanding data analytics and text mining services sector. The scope of the study is as follows:
• Identification Of Two Potential Investment Targets
• Review Of Information Packs Provided By The Companies Covering Financials, Operations, Strategy, And Plans
• Verification Of One Company Promoted For Sale By A Bank And One Identified By The Client
• Independent Assessment Of The Companies And Their Potential Value
• Identification Of Two Potential Investment Targets
• Review Of Information Packs Provided By The Companies Covering Financials, Operations, Strategy, And Plans
• Verification Of One Company Promoted For Sale By A Bank And One Identified By The Client
• Independent Assessment Of The Companies And Their Potential Value
Solution
Financial Analysis
Annotated Financials
• Provided annotated financials with feedback on any points to note
• Independent profit and loss forecast
• Ratio analysis and price benchmarking
• Business unit and geographic contribution breakdown
• Cost analysis
Operational Analysis
• Verification notes on the documented operational information
• SWOT analysis of company’s operations
• Gap analysis of its competencies and services
Annotated Financials
• Provided annotated financials with feedback on any points to note
• Independent profit and loss forecast
• Ratio analysis and price benchmarking
• Business unit and geographic contribution breakdown
• Cost analysis
Operational Analysis
• Verification notes on the documented operational information
• SWOT analysis of company’s operations
• Gap analysis of its competencies and services
Methodology
Primary Research:
• Conducted interviews with the target company, its clients, and competitors
• Desk research on trends and growth in the data analytics market
Secondary Research:
• Performed financial due diligence, including line-by-line analysis of financials and definitions
• Developed independent forecast of major P&L lines
• Conducted comparative ratio analysis against industry norms and recent deals for pricing guidance
• Compared different business units and geographies
• Conducted interviews with the target company, its clients, and competitors
• Desk research on trends and growth in the data analytics market
Secondary Research:
• Performed financial due diligence, including line-by-line analysis of financials and definitions
• Developed independent forecast of major P&L lines
• Conducted comparative ratio analysis against industry norms and recent deals for pricing guidance
• Compared different business units and geographies
Client Benefits and Feedback
Investment Decision Support
• Enabled the PE firm to finalize its investment target
• Assisted in pricing the investment offer using research inputs
• Enabled the PE firm to finalize its investment target
• Assisted in pricing the investment offer using research inputs