Case Studies

Post acquisition integration

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Fork in the Road
Assessing an Acquisition

Providing synergies

As the number three manufacturer of outdoor recreational products, our client was struggling to move up the food chain. They had identified an acquisition target that had the potential to significantly increase their sales as well as give a boost to their traditional products. The valuation that the target was asking was very high relative to historic performance but our client considered the purchase anyway but needed our help to determine if it was worth it. Deciding which fork in the road to go down was critically important for our client.

Genoa met with the owners of the target company and began down a market segmentation exercise to determine just how big the market could be. By conducting interviews of existing buyers of this new product line helped to shape the necessary analysis to determine the market potential.

Desk research allowed us to get a handle on the different market segments, applications and overall budgets for this type of product. Interviews complemented the desk research with buyer decision criteria, budgets and future needs. This combined analysis provided the necessary insight into what potential product modifications would be necessary to capture a larger share of the market.

While the overall market for similar products was over $1Billion, the space that this particular target participated in was a much smaller niche. Additionally, many of the characteristics that would make this target attractive were ones that could only be done with significant investment.

The analysis was critical in providing a framework for negotiations with the target that would ultimately lead to saving millions of dollars in the purchase price or provide our client’s CEO and Board with enough information to comfortably walk away from the deal if they were not able to get the acquisition price to align with the overall valuation.