Diligence Services.
Our Private Equity Fund Manager client specialises in investing to rebuild great businesses. Their focus is on transforming operational performance and creating value in companies that are currently struggling but have turnaround potential. One such company, was one of the largest providers of time sensitive freight and freight forwarding services in Australia and New Zealand. Seeing the potential, our client planned to acquire and transform the business.
Challenge
The challenge for Insight Valuations was to navigate the data that was extensive and not complete and work with multiple stakeholders to extract the information and insight we required in a highly competitive process.
Actions
We completed a deep dive into the accounts receivables, drawing on experience working with many global organisations with multiple operating companies, multiple lines of business and across international jurisdictions. The result was detailed evidential data that provided the Private Equity fund with three essential outcomes:
- It identified the level of funding available against AR.
- It found working capital improvement opportunities and M&A synergies that proved the potential for transformation.
- It provided evidence of future potential funding levels that would likely be available to the acquired target.
Results
The deep insights uncovered had a positive impact on transaction decisions and strategic approach post settlement.
Our Private Equity client was able to identify and prioritise the areas of improvement that related to working capital in the business.
They were able to act rapidly and position the business with additional options in their capital structure.
Our insights provided an opportunity to achieve millions in annualised savings through immediate and longer-term actions.
The release of additional working capital expected from improvements would allow the business to focus on growth initiatives and further performance improvement initiatives. Insight Valuations provided answers that were critical to ensuring that the borrowing base was formulated correctly giving confidence to supporting lenders.
Highlights
- Our deep understanding of the collateral and the business operations contributed to our clients success in edging out other potential suitors.
- A c$500M capital raise was achieved by our client including a c$200m loan against receivables.
- By being persistent, diligent and committed to this time critical assignment we were able to provide insightful opinions to the buying team which ultimately facilitated the business transformation.