Transaction Due Diligence

The Challenge

Is your due diligence team equipped to assess the revenue sustainability of your next investment, strategic partnership, merger, or acquisition target?

Unfortunately, in the time pressure of due diligence it’s all too easy to check off the “quality of revenues” box based on a numbers-driven conference room analysis. Understanding historical sales growth, margins, and customer churn is a great start. Calling customers to gauge their loyalty adds another layer of validation. Even so, that approach is merely a proxy for an unbiased evaluation of the target’s future growth prospects.

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The Solution

Because we understand the intersection of go-to-market strategy and sales execution, Catalytic Advisors can provide significant insights beyond traditional due diligence revenue analysis. These insights can make the difference between a successful acquisition and a failed one, and can improve those that go well.

Our services include:

  1. “Conference room” analysis of revenues, including historical customer churn, sources of growth by customer and product segment, pricing margin analysis, etc.
  2. Market opportunity and competitive analysis. Sizing the market, its growth rate, and understanding the target's market share is the first layer of this work. Detailing the competitive landscape is the second.
  3. Voice of the Customer insights. If there is an existing database of customer feedback, we will mine this data to form a coherent picture of customer loyalty. If none exists, we will conduct phone surveys to develop it. Note: if the target is a distributor, we recommend developing the Voice of Suppliers as well.
  4. Assessment of sales, marketing, and customer service functions. This adds another dimension to the diligence findings and also provides a head start on post-closing implementation priorities.