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Operations Due Diligence for a CPG Acquisition

A private equity firm looking to acquire a line of business from a large consumer products company tapped Clarkston to conduct operations due diligence around a particular industry target. The Clarkston Diligence Team was entrusted with the evaluation of the target capabilities specific to its manufacturing and supply chain operations. We examined operational data provided by the target and conducted site visits to thoroughly assess the operational strengths and potential areas for improvement in support of the deal underwriting.  

Clarkston’s industry experts and diligence team evaluated the target’s capabilities across manufacturing and supply chain related functions, including procurement, demand & supply planning, manufacturing execution, warehousing and transportation management, and more. Juxtaposed against industry best practices and peer competitors, our team identified specific strengths as well as underperforming areas that may require future investment. We evaluated the current system landscape and designed future state recommendations for a new standalone entity. 

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Clarkston further produced a detailed risk assessment and provided mitigation strategies for each identified risk. With the overall evaluation, Clarkston was able to advise on critical support elements from the parent company to include in the Transition Services Agreement (TSA) as the teams proceed toward the deal negotiations process. 

By partnering with Clarkston, the client was able to evaluate the deal with an in-depth understanding of the target’s manufacturing and supply chain capabilities. Clarkston subject matter experts provided contextual view of the target’s performance against peers and industry benchmarks. The detailed operations and systems investment roadmap provided by the Clarkston Diligence team allowed for a granular level of visibility and expectation-setting on the near, mid, and long term spend areas.  

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Tags: Case Study, M&A, M&A Integration, Due Diligence