One of our private equity partners had started the due diligence process of a producer of fabrics for the housing industry that supplied its products all over the world. While they were fully on top of the financial analysis they asked us to perform a commercial due diligence. This was a second opinion to see if the business plan was actually realistic.
At first we dived into the historic sales data and looked at it from multiple angles like customers, products and territories. We did not only look at the AS-IS but especially at the developments in the last years. This analysis resulted in a few hypotheses that we wanted to test. We were not allowed to survey the customers directly so we did mystery shopping across 5 different countries in 2 weeks.
By talking to numerous distributors and retailers we got a good view on the market conditions and how the company was perceived. Together with the data analysis we could paint the full picture of the commercial risks and opportunities for the private equity team.