 |
 |
| Underground contract mining services |
Context / Scope of project
Our client, a private equity firm with over $2billion wanted to invest in an underground contract miner servicing mostly second tier mining companies. The target had experienced rapid growth in the last few years and its management were forecasting this to continue. PIP was asked to review market growth and competitive advantage of the target in competing for that growth. PIP also reviewed the immediate pipeline of opportunities for the target and the likelihood of success.
Key Insights:
- Clarified issues with engaging larger customers
- Identified slight exaggeration in management forecasts on existing mine life
- Identified that high cost customers should be okay – commodity by commodity on the cost curves and forecast commodity prices
- Identified a good pipeline – commodity by commodity.
Outcome:
- Client did not invest in the business.
|
|
|
|
|
What we did:
- Provided focused insight into key market drivers, dynamics and outlook
- Reviewed target’s competitive positioning and growth options
- Drilled down on expected project wins to pressure test target’s revenue pipeline
- Determined if the target’s poor reputation with larger blue chip miners could be overcome
|
|
|
|
