Global Manufacturer and Strategic Acquisition

CEO asked Elliott Davis to answer: "To what extent can the operations of the two companies be consolidated? What can I expect in the way of synergies? Which acquisition scenario generates the most cash flow?

Context

Global manufacturing company was considering a strategic acquisition of a US-based competitor.

Customer was interested in understanding the potential to achieve operational efficiencies and synergies through asset and footprint optimization. This required determining the suitability of consolidation – both the likelihood of success and the expected SG&A gains.

The customer was also interested in translating the operational findings into a flexible financial model that would help inform potential value creation and deal structure under various acquisition scenarios.

Our Approach

Elliott Davis broke the questions into workstreams:

On-site due diligence at the target’s headquarters

• Interviews with leadership team
• Extensive tour of target’s facilities
• Assessment of assets, process controls, quality, and management systems
• Considerations for asset relocation and site consolidation
• Full reconciliation of financials by business and product; cost allocations

Pro Forma financial projections

• 5-year projections of fully-synergized net income and free cash flow vs. target’s normalized financials
• Review of multiple acquisition scenarios

Customer Results

Elliott Davis delivered a complete view of the investment to answer critical questions.

• Savings opportunities from operating efficiencies and labor
• Risks and timeline for consolidating operations
• Cash flow forecast over five-year period (including one-time costs

We Can Help

For more information on this and other topics, contact a member of our team.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.