Usually, it entails coming in pre-LOI and doing the “desk work” to review the CIM. Very high-level review checking supplier concentration & risk, checking where they’re current suppliers are located (Can we move them to quickly save?), and contract review & study for mark to market commodity inflation to when they negotiated the deal, they get a signing bonus but realistically they should re-negotiate and get those savings into EBITDA.
Functional view of risks and opportunities provides unique insight during due diligence.
Opportunities
Impact of portfolio wide agreements
Potential for cost reduction projects
Benefits of new company on existing portfolio
Risks
Risk to growth (capacity, systems, etc.)
Potential quality, delivery & cost issues
