Outside-in DD of a Japanese conglomerate
For a large investment manager, conducted outside-in due-diligence on a Japanese conglomerate thought to be underperforming its potential.
An assessment of the conglomerate’s 10+ businesses and their markets was followed by deep dives on the 5 most attractive ones to identify the potential for these businesses and the options to unlock that value.
Context
Our client, a global investment firm, had identified a large diversified Japanese conglomerate that appeared to be underperforming its potential.
The conglomerate had roots in traditional businesses, and had spread into a range of adjacencies in emerging and leading technologies.
The challenge was to unpick the aggregated corporate financial reporting to identify the key businesses, their actual performance and market positioning, sources of potential value and performance improvement levers.
Approach
Our international team included local Japanese and Korean consultants to undertake data gathering, conduct interviews, and navigate complex reporting and limited public disclosure.
An intense expert interview programme ran alongside market and sector scans, and allowed us to rapidly understand the performance and competitive positioning of each business and prioritise them for further deep dives.
An iterative and scenario-based approach, triangulating different sources, resulted in a robust assessment of financial performance and strategic options to unlock value, which were integrated into a model that fed into the investment firm’s valuation.
Impact
In two two-week sprints, our team unpicked an obscure conglomerate reporting structure, provided a clear view of the current and potential performance of each of the businesses, and identified those with the highest potential and the options for unlocking the value at a corporate level.
Our client was delighted with the speed and depth of insight that we provided into this complex organisation, on the back of which they could make their investment decisions.