Rock Ledge Resources > Jerry Hammann > Representative Project - Manufacturing Acquisition Due Diligence and Operations Forecasting

Manufacturing Acquisition Due Diligence and Operations Forecasting

Business Challenge

Consolidation and outsourcing in the auto industry is a decades-old trend. At one time companies such as Ford were massively vertically-integrated; now most of automotive component parts are produced by third-party suppliers. Two large third-party suppliers were contemplating a merger. The prospective new management teams wanted to better understand their prospective merger partners and evaluate how the merged entities could improve their operating performance.

Solution

Mergers are often undertaken in the belief that the merger will reduce duplicative costs. These so-called "synergy savings" are not only the motive to merge, but potentially a large part of the acquisition valuation as well. A Rock Ledge Resources principal was part of a team of consultants retained by Company A to conduct due diligence on Company B. As part of this effort, the principal created a financial and operating model for the merged company, enabling Company A to better identify and quantify possible future synergy savings.

Results

The team delivered the merger valuation, assuring Company A of "no surprises" from Company B. The principal developed a management and operating plan to realize the potential synergy savings that were a focus of the merger decision.

Relationships: Jerry Hammann | Business and Strategic | Manufacturing