Private Equity

Industry Overview

While new investment records are being set, traditional market research is still an integral part of pre-deal due diligence and post-deal revenue growth. As private equity firms evaluate investment candidates, a detailed understanding of the relative market, growth potential, and competitive position is extremely useful in the overall valuation of the target company. Moreover, an insightful analysis of the customer portfolio can provide critical information about future revenue projections.

PMG has the core strengths – systematic data gathering, insightful analysis, high-value execution – to play a key role in your due diligence process.

Acquisition Evaluation

Within the overall due diligence process, Commercial Due Diligence (CDD) is often one of the most undervalued elements. However, issues uncovered in a well-executed CDD process often identify issues that feed into price negotiations, and therefore reduce the risk of overpaying. Examples that may affect the overall value of the company and therefore drive the negotiated price include:

• At risk volume from major customer
• Competitors investment in potential game-changing technology
• Limited or no differentiation on critical product or service attributes
• Declining competitive position
• Potential changes in government regulations of subsidies
• Looming offshore competition
• Understanding the distribution channel and who controls the customer

Revenue Growth & Operational Alignment

Once a business is purchase, PMG can help identify, prioritize, and capture market growth opportunities. Using primary and secondary data collection methods, we offer keen insights into critical market factors affecting growth potential, such as:

• Market size
• Market projections
• Relative profitability
• Threats to profitability (competitive, legislative, technological, etc.)
• Growth factors
• Profiles of potential competitors
• Potential competitive entrants to the market
• Key customers
• Market share
• Purchase volumes
• Performance expectation
• Unmet needs
• Other market factors to fit specific business questions

PMG’s market opportunity assessments can vary in scope and scale. High-level assessments are designed to allow clients to make informed decisions quickly, compressing their speed to market. While more in-depth assessments, consisting of multiple phases and multiple segments, can identify the optimal markets to pursue based on capabilities and strategic direction.