Operational Due Diligence
We conduct a quick but thorough expert review of existing and prospective operating value and vulnerabilities of the target company, providing an edge in the buying process – avoiding “bad deals” and finding “hidden diamonds”. Our deep operations expertise enables us to identify issues and find value where others often can not. We incorporate our operations and industry expertise and a highly analytical approach to create the clearest picture possible of the target and a solid understanding of future operations requirements (e.g., investment, KPIs, skill base) to maximize value capture. We then offer pragmatic and value-driven recommendations to maximize investment potential and a top- level roadmap to jump start operations improvements post-acquisition.
Validating Management's Operations Plan and Identifying Additional Savings at Customized Consumer Products Company
Identified $35-45MM in cost reduction opportunities, 2-3x management’s savings plan, giving our client an edge to win the auction. Despite very limited access to the target’s management, plants, and data due to the nature of the auction, Gotham was able to leverage dataroom information, a plant visit, and our relevant experience to build a solid fact base of the target’s cost structure – including a detailed 4-year line-item-level view of the operational cost structure and an analysis of 2,000-employee workforce linking each individual to the specific cost line in the cost structure – and to both validate and expand savings opportunities via a comprehensive outsourcing/consolidation model and an analysis of sales, marketing, customer service, and G&A costs.
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Establishing Quick Read On Cost Savings at National Coffee Roaster and Distributor
Conducted 2-week operations assessment of target to establish initial read on cost reduction opportunities. Despite limited access to the target’s management, plants, and operations data, Gotham was able to create a clear picture of the target’s cost structure in both operations and its DSD network. While the cost reduction opportunities needed to achieve our client’s financial target did exist, capturing those savings posed significant culture and business strategy challenges. Given the high valuation of the target and the significant hurdles standing in the way of savings, the client leveraged our work to make a fact-based decision at the early stage of the process to exit the auction process.
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Rapidly Validating Margin Improvement Opportunities and Assessing Capacity/CapEx Risk at Testing Services Provider
Conducted 2-week operational due diligence to validate margin improvement opportunities and assess capacity/CapEx risk. Gotham visited 7 facilities and conducted full-day operations review with management to understand operations management approach/processes and visions/plans moving forward. To fill gaps in this data poor situation, we performed various in-depth analyses – recasting labor cost structure, analyzing job-level data to understand profitability, building a bottom-up labor utilization and fixed cost model to project margins with revenue growth, etc. Gotham’s due diligence work enabled our client to move forward with confidence and successfully acquire target in a proprietary deal.
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Post-merger Integration Planning for Tech-enabled Compliance Services Providers
Developed a detailed post-merger integration and communication plan that identified and prioritized post-merger integration requirements as pre-deal, 100-day, and post-100-day, and identified the integration team with assigned responsibilities for key integration priorities. The effort included establishing the target end-vision of the combined company and determining post-merger integration requirements through a thorough assessment of current situation at both companies.
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Uncovering Cost and Inventory Savings Opportunities and Assessing Operational Capabilities at Licensed Brands Household Goods Company
Conducted 1-week opportunity assessment for inventory, labor, material, freight, distribution, and overhead costs from both standalone and synergistic perspective. Identified $3-4MM in cost reduction opportunities and $4-5MM in inventory reduction opportunities. Client acquired the company and merged it with a portfolio consumer goods company. Subsequently, assisted in capturing $4-5MM in inventory and $2MM in freight savings at this growing company which became one of the largest suppliers to big box retailers.
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Standalone and Synergistic Cost Savings Opportunities at Consumer Goods Company
In an auction situation, conducted Operational Due Diligence to identify EBITDA and working capital opportunities for a company with China sourcing, domestic manufacturing, and both mass-merchandiser and specialty retailer distribution. Enabled auction win with identified savings of $4-11MM in EBITDA and $13-23MM in working capital.
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