Due Diligence Improvement Prevents M&A Mismatch

PROJECT BACKGROUND

It is estimated that demands on the global food supply will require growing twice the amount of food produced today using the same available land. To help meet this goal, a global animal health and nutrition company is pursuing a dual growth strategy based on science and acquisition.

The client’s development group is responsible for conducting the due diligence efforts for all potential acquisitions. Through two previous due diligence projects, the company was confident they had the needed knowledge, but felt they lacked the consistent processes and disciplined oversight to flawlessly expedite the effort.

In order to meet challenging strategic growth goals, the company needed to better realize the anticipated benefits resulting from seamless integrations of acquisitions. The management team recognized that analyzing information derived from due diligence partners required a disciplined project management approach to ensure timely and smooth evaluations. In order to mitigate the inefficiencies, the company engaged Integrated Project Management Company, Inc. (IPM) to manage the due diligence process, evaluate the business integration drivers and instill a project management structure to expedite the proposed acquisition of a European-based technology company.

IPM’S SOLUTION

IPM reviewed the rationale and business case for the potential acquisition and confirmed priorities for the due diligence effort. Based on value drivers and priorities, IPM initiated a detailed project plan, identified key team members, established roles and responsibilities, identified gaps and redundancies in the current due diligence process and documented assumptions and high-level risks.

In identifying the overall critical path for the project, IPM was able to create new tools and processes to fill the identified gaps for due diligence and the requisite business analyses. A virtual data room was created for team members from both the company and the potential acquisition target to review key documents.

A team communication plan, revised tools and document repositories were established utilizing a SharePoint site for the company and the target acquisition. This enabled speedy, concise and targeted communications to the right audience in a timely manner. IPM also introduced a risk management approach to delineate project risks and develop mitigation and/or contingency plans.

IPM’s work was immediately applied to the due diligence assessment underway with the European target, demonstrating to the company the positive outcomes of a disciplined project management approach.

PROJECT RESULTS

IPM, with the company’s development group, implemented a disciplined project management approach to due diligence. This approach integrated the business objective of growth throughout the acquisition while allowing for informed, timely decision making on potential targets. IPM established a set of project management tools and templates tailored to the company’s needs, for use in future due diligence targets, ensuring a consistent approach for their acquisition activities.

IPM’s approach to creating the revised due diligence process while simultaneously applying it served as an efficient model for change. As a result, the company came to the decision to not pursue the European acquisition. This allowed the company to assess risk and expedite an informed decision to prevent a costly integration mismatch.