Commercial due diligence in homewares
Commercial due diligence in the homewares market for a PE client who went on to take a majority stake in the business.
With markets in a high state of uncertainty during the COVID-19 pandemic, and the target potentially enjoying a short-term boost, our team focused on the potential downside case. Our rigorous review of the market, company performance, international expansion potential and brand strength was instrumental to the client’s decision to invest.
Context
A UK-based Private Equity firm was weighing an investment in a UK homewares business with a portfolio of heritage brands across numerous home categories.
With global consumer markets still in a high state of uncertainty due to the COVID-19 pandemic, our team focused on the downside case and unpicking short-term, positive pandemic impacts from long-term growth potential, to ensure that there was a robust platform for investment.
Approach
Our lead consultant brought decades of experience in the space, enabling hypothesis-led, rapid analysis. In 5 weeks, we carried out a consumer survey and interviews, detailed analysis of the target’s historic performance, an in-depth review of the UK market and potential from digital channels, and a high-level assessment of the potential from key international markets.
We worked closely and nimbly with the client investment team throughout, sharing emerging findings to inform their broader diligence and meetings with the target’s management in real-time as if, the client observed, we were a seamless part of their in-house diligence.
Impact
Together we identified strong fundamentals and significant potential for sustained growth, particularly within international and digital markets.
Our client was successful in taking a majority stake in the target and drove a focus on the growth areas we identified.