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
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Impact of portfolio wide agreements
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Potential for cost reduction projects
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Benefits of new company on existing portfolio
Risks
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Risk to growth (capacity, systems, etc.)
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Potential quality, delivery & cost issues
