Rollup acquisitions for a PE-owned benchmarking provider
Assessed a new market opportunity for a cost benchmarking company in the automotive sector, leading rapidly to making acquisition approaches.
Our client foresaw new growth opportunities working with automotive OEMs as they shift their R&D focus to electric and autonomous driving vehicles. Building a thorough understanding of competitor strategies, evolving customer needs and the changing dynamics in the automotive sector, we validated the client’s hypothesis about the attractiveness of creating a new service offer and defined where to play, ultimately identifying two acquisition targets, conducting diligence, and building a high-level integration plan.
Context
Our client, the CEO of a PE-backed cost benchmarking provider to the automotive sector, was driving an ambitious roll-up strategy to generate rapid growth and a market-leading position. The goal was to expand their services to cover software and electronics costings, reflecting OEMs shift in focus to electric and autonomous driving vehicles.
Approach
We led an extensive programme of industry and expert interviews to thoroughly understand competitor strategies, evolving customer needs and the changing sector. We combined that with desk research and financial analysis which established that the market for automotive software and electronics cost benchmarking was highly attractive and underserved, and that our client had a unique opportunity to build the new business line.
We then identified relevant acquisition targets, conducted commercial due diligence on two targets, and developed high-level plans for the integration.
Impact
The company and its PE owner, convinced of the expansion opportunity, moved immediately to open negotiations with both targets. One of these recently concluded with a successful acquisition, reinforcing our client’s position at the leading edge of their industry.