Vendor Due Diligence in the context of a tertiary LBO

Sector of activity: Retail
Size (sales in €m): 500

Context

  • The Group was looking to re-engage in a tertiary LBO and find a new investor to take a majority stake
  • The Group had grown strongly over the previous 5 years and doubled its sales by i) changing its product mix, ii) creating new distribution channels (Internet) and iii) establishing an international presence

Our mission

Preparation of financial vendor due diligence with specific points of analysis and particularly:

  • Analysis of historical performance by store type and by year
  • Analysis of the product mix’s impact on the margin
  • Analysis of the contribution of new distribution channels (Internet, International) and highlighting with supporting figures of cross selling between the store network and the Internet on the basis of a case study concerning a flagship store

Results

  • The Group found an investor and the transaction was wrapped up two months after the end of due diligence

Key success factors

  • In-depth knowledge of the Group since the partner in charge of the case had already conducted the VDD during the secondary LBO
  • Ability to present the key challenges and validate past decisions made by Management in order to reassure investors
  • Long-term analyses which demonstrated the ability of management to control purchasing and preserve margin levels within a long-term perspective