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Context / Scope of project
Our client, a private equity firm (fund of over $1billion) wanted to invest in business manufacturing equipment for the mining industry. Unlike many mining services businesses that rely on generic labour and don’t have intellectual property or low competitive advantage this business had products with real intellectual property. PIP was asked to review the business, the market and the high growth expectations forecast for the business.
Key Insights:
- Identified issues with growth strategy
- Issues with intellectual property owned by a competitor
- Developed confidence around Australian growth rates and opportunities.
Outcome:
- Client did not invest
- Target subsequently went into administration.
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What we did:
- Standard CDD for debt bank presentation
- Raised key risks
- Provided focused insight into key market drivers, dynamics and outlook
- Reviewed target’s competitive positioning versus other competitors – competitive advantage
- Drilled into forecast growth for numerous business units that had only just been merged
- Surveyed customers to understand key purchasing criteria and also ranked competitors on each of these criteria.
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