Due Diligence & Pre-Merger Integration
Hudicor offers a range of due diligence consulting services to help guide you through all subsequent phases of the due diligence process.
In many cases, an acquisition involves a high degree of risk. It is well known that selecting the right acquisition candidate can significantly enhance a company’s future success. A poor choice of an acquisition candidate, on the other hand, can irreversibly destroy the value of a company. The difference between the two often comes down to a clear M&A strategy followed by thorough selection and due diligence of acquisition candidates.
Our mission at Hudicor is to arm you with the right information
Our success at assessing an acquisition candidates’ potential stems from hands-on experience and market-leading expertise. Hudicor’s senior team has more than 100 years of combined hands-on experience in the fields of Strategy, Digital Transformation and in particular Industry 4.0, Sourcing & Procurement and Supply Chain & Operations. Our partnership model ensures our knowledge remains market leading via our ongoing collaborations with other experts at the forefront of these fields.
We offer a five-pillar due diligence process that is used to identify the drivers of transactional value. It allows you to evaluate an acquisition target’s potential to the fullest extent and it will provide you all the information you need to enter the negotiation process with confidence.
Strategic Fit
As a first pillar, we analyse whether the acquisition candidate and the risk of the transaction are compatible with your M&A strategy and contribute to your company’s overall strategic objectives. As part of this effort, we will detail the acquisition candidate’s customer base, market position and ability to respond to future market trends. It is valuable to try to assess the impact of the merger or acquisition on the market. Potential opportunities for revenue enhancement are also identified.
Sourcing & Procurement
Sourcing & Procurement is our second pillar. We set up pre-merger clean room, a virtual data room for storing highly confidential documents in a secure environment while continuing to adhere to antitrust laws. Our team conducts an in-depth analysis of selected key spend categories and the target’s procurement organisation. We provide an overview of the short- and medium-term synergy savings. In this area, we have an exceptional track record. As an example, our team conducted procurement due diligence resulting in approximately $1.5 billion in annual cost synergies. Post- merger, it became one of the world’s five largest consumer product companies.
Digital Maturity
Digital maturity is the third pillar. Analysing the acquisition target’s current digital maturity and identifying which digital technologies still offer opportunities for this organisation is the first step in determining the value creation possible in the short and medium term. Additionally, an assessment is made of potential synergies within this area with particular focus on Industry 4.0. Along with our expertise, we have an extensive network of experts we work with in this area. An example is our guidance on the launch of the Industry 4.0 pivot factory that accelerated the development of Industry 4.0 in Belgium.
Operational Due Diligence
Operational due diligence is our fourth pillar. It is an important part of a target’s overall due diligence. This section provides a comprehensive analysis of operational processes. Here, we start with the feasibility of the business plan. Can the proposed growth be accomplished with the current capacity and workforce? We pay particular attention to identifying operational risks and the potential level of exposure. We also question the feasibility, impact and timeline of the proposed improvement initiatives. As a final step, we identify potential synergies. It’s a complex part of a target’s overall due diligence. We have the practical experience to provide you with an accurate estimate of what synergies can be realised in what timeframe.
Environmental Due Diligence
Environmental due diligence is a final, but increasingly important pillar. There is a growing emphasis on sustainability and companies are also under increasing pressure from political quarters to become more sustainable. A thorough audit is essential and requires boots on the ground to conduct site surveys with several partners to gain an understanding of how the current operation is organised and how it impacts the surrounding environment. In this stage, permits and licenses are validated, compliance with regulations and guidelines are verified and potential risks identified. This is done by interviewing current and past stakeholders, employees, and local residents. Also, all past problems are reviewed carefully and their impact is assessed. This detailed understanding of the target’s environmental and safety risks helps increase your negotiating power.
Accelerated integration and value delivery by our pre-merger integration approach
Following the due diligence phase, if you proceed with the acquisition process of the target, we define a clear roadmap with milestones for each pillar to achieve the proposed synergies. We are known for setting ambitious but achievable synergy targets for our clients. Honouring these commitments within the agreed timeframe is our top priority.
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