M&A Cases
Index
* The cases are summarized and compliant with confidentiality agreements
International Expansion
Beverages
The Client: a European leading beverages company.
The Challenge: to evaluate the value creation potential of an acquisition of a relevant player in Latin America refining the preliminary client modeling of leveraging their expertise in portfolio development and marketing over the target company platform of brands, distribution, and tradition.
The Evaluation: our advisors enhanced the client draft analysis and improved the category dynamics reading complementing the plan with (i) the exploration of relevant organic initiatives overlooked by the target company, (ii) focus on fewer and bolder portfolio initiatives, (iii) the revisit the frame of reference evaluating adjacency segments potential, (iv) validate innovation pipeline success rate per distribution channel and area, and (v) the refinement of the implementation plan improving events sequencing and A&P eliminating unproductive overlaps in time, channel and geography.
The Solution: the final recommended strategy predicted a total opportunity of more than duplicating the target company baseline revenues in a 5-year timeframe while improving gross margins by the application of the client unique capabilities.
The acquisition was realized, and our client is currently a leading and growing player in the market.
Alternative Investment
Chocolates
The Client: a US capital asset manager focused exclusively on renowned companies.
The Challenge: to increase shareholder value creation accessing alternative investment strategy - the potential bargain acquisition of assets in the chocolate category to be restructured and divest with significant profit.
The Evaluation: our advisors performed an in-depth immersion in the target asset and the category concluding that: (i) the asset attractiveness was gradually depreciating due to the lack of focus of its parent company, (ii) strategic issues addressing would be a heavy burden to a new comer to tackle due to the lack of necessary capabilities and infrastructure, and (iii) the asset survival would be highly dependent of transition service agreements or complex strategic alliances.
The Solution: after evaluating multiple alternatives to solve the strategic issues, we concluded that the acquisition value of the asset to allow value creation to our client would be significantly lower than the asset parent company expectations.
The acquisition was not realized by our client or any other interested company, and the asset remains for sale.
Value Co-creation or Divestiture
Salty Snacks
The Clients: a pioneer startup in trendy food and a leading snacks company in a primary developing market.
The Challenge: to understand the opportunity size in the salty snacks category and (if) how the client's capabilities could be strategically assembled to capture that opportunity.
The Evaluation: our advisors dissected the category. They concluded that the current competitive landscape propitiates a unique opportunity window (2 to 3 years duration) for the clients to join forces and assume the second position in the marketplace in 5 years. The category incumbent faces an unprecedentedly weak performance, and business model fragility while other contenders do not own the capabilities to leverage the situation.
The Solution: our final recommendation was to form a JV to co-create and capture the significant value available by synergizing complementary and distinctive capabilities of the clients. The synergies value in play would be significant and originate from the top line. The opportunity size is significantly larger as the solution strategy was evaluated only in the exploration of the modern trade channels within developed areas of the country (less than 50% of the potential).
In 2021, we were hired to advise and conduct M&A negotiations for the client with a leading player in the food industry. By the end of the same year, the deal was closed delivering record multiples to our client.
