Transaction Support 

 

Daymark provides pre-close transaction support (both pre and post-LOI M&A market diligence, sell-side diligence, and other services) – analyzing key market based issues for a range of investor groups (buyout shops, holding companies, growth equity / venture capital, etc.).

 

Daymark’s clients tend to pursue acquisitions in the lower middle and middle markets (target companies tend to range from ~$2MM to $50MM in EBITDA). Typical engagements may answer the following questions:

 

Market Size and Trends

  • What is the level of (quantifiable) demand for the target's products / services across targeted end markets?

  • What are the key drivers of demand in the market? 

  • How are the key market drivers trending and expected to trend going forward?

  • What other market dynamics have implications to the growth prospects for market participants?

 

Competitive Landscape

  • Who are the competitors to the target's products / services in the market?

  • What are recent trends in competition (consolidation, new product / services strategies, etc.)?

  • What is the basis for competition in the market? 

  • How is the target positioned in the market?  Are the target's services / products differentiated?

 

Company Performance

  • What is the strength of the target's customer relationships?

  • How does the company's customers (and other market participants) view the performance of the company?

  • How likely would customers be to recommend the target to colleagues / peers (Net Promoter Score)?

 

Mapping of Decision Process and Value Chain

  • What is the buying process?

  • Who are the key decision makers for end users / market participants?

  • What is important to decision makers?  Why do they decide to use a particular product / service?

  • How and why are specific vendors / providers selected? 

 

Acquisition Screening and Prioritization

  • How many potential acquisition candidates are there in a potential market? 

  • Who are the candidates and what are their profiles (e.g., revenues, ownership structure, strategy, clients, etc.)?

  • What is criteria that should be utilized to rank order potential acquisition candidates?

  • Based on this criteria and direct market research, which companies represent the most attractive targets? 

 

Engagements vary and are tailored to meet client's needs.  

 

Engagement Details

  • Post-LOI market diligence engagements typically take 3-4 weeks to complete.  Daymark also provides short-term pre- LOI market / company analysis (1-3 weeks).

  • Findings are driven by direct market feedback as well as publicly available market research.

  • Key issues addressed include:

    • Market size and trends

    • Competitive landscape – basis of competition

    • Company performance (customer feedback and revenue projections)

    • Mapping of decision process and value chain

 

 

Sample Case - Flexible Packaging (Stand-up Pouches)

Background

 

  • The client is a middle market private equity buyout fund assessing a company in the flexible packaging market.

  • The packaging technology represents a new method (utilizing new regulatory compliant equipment for flexible packaging for the food and beverage market and other industry sectors).

  • Client is focused on assessing both the growth of demand for the packaging type, but the feasibility of the technology as well. 

Key Issues

 

  • What is the opportunity / market size for this type of flexible packaging? How is demand expected to trend across end use segment, geographic areas, and key packaging technologies?

  • What are the key growth drivers for the packaging? How are drivers expected to trend in the next 2 to 5 years?

  • How do end users (e.g., food manufacturers) select a type of packaging for a product? Do they tend to build packaging capabilities in-house vs. the use of co-packers? How are 3rd party co-packers selected? What is important to decision makers in the evaluation process?

  • What other types of competing equipment and what are the capabilities of the packaging machines? Does the target’s technology truly represent a competitive advantage?

Methodology
 
  • An extensive database of competing machines and capabilities was compiled through desktop research and conversations with market experts and competitors.

  • The market for the packaging type was vetted through conversations with decision makers at end users across multiple markets and geographies. 

Outcome

 

  • Daymark’s report enabled the client to evaluate the size of the market opportunity, the target’s competitive positioning and performance, and identify opportunities for growth going forward.

 

 

Daymark has conducted Transaction Support services across many different industries

 

Contact us to learn more about our Transaction Support engagements.