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Operational Due Diligence

As the economic recovery commences and M&A activity increases, the focus on operational matters as a source of value in transactions has never been more prevalent. Both Corporate and Private Equity deal professionals are increasingly looking to drive transaction value through improving operational performance and proactively managing operational risk, whilst lenders continue to seek additional insight and comfort on Management’s business plan, forecast operating performance and cash flow.

For Corporates that are acquiring, value is typically realised in the form of synergies, or when they are disposing, from capturing and communicating an effective value enhancement proposition for any entities being sold. For Private Equity clients, operational efficiencies and cost reduction continue to be a greater area of focus, both in the area of pre-deal due diligence and also in their approach for managing the organisations under their ownership.

What we do

Our dedicated Operational Due Diligence (ODD) team combines extensive operational restructuring and performance improvement expertise to deliver insight regarding operational risk and potential opportunities in due diligence engagements. We bring together both experienced line managers and operational due diligence specialists to provide deep and focussed insight in both pre-deal diligence and in identifying opportunities for post deal value enhancement.

How we can help

  • Develop an understanding of the composition and nature of the target’s cost base and operational capability (including areas of IT);
  • Review and evaluate forecast cost reduction plans, including restructuring plans, synergy reviews and bid defence plans;
  • Review and evaluate operational risks within a business, for example the carve-out of a division from a parent company or the deliverability of a major cost reduction programme;
  • Identify opportunities for further cost reduction and assist in the development of performance improvement plans; and
  • In partnership with our Post Merger Integration team, develop plans for early ownership/ first 100 days to leverage change momentum in realising value enhancing operational benefits.

For further information, please contact Jason Caulfield or Matt Penny, or call 020 7936 3000.

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Key contact

Angus Knowles-Cutler Angus Knowles-Cutler
Partner, Head of Transaction
Services, Tel: 020 7007 2946

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