Outside-in, target reviews
Investors often seek information on the value of an unlisted target or a business unit or subsidiary of a listed entity. Often the small scale of the sector does not justify specialist analyst assessments.
For these investors Temple can facilitate go/no-go investment decisions by undertaking an outside-in review of the target. These reviews typically comprise identification and synthesis of public domain information, industry expert interviews and ‘guerilla’ research to form a view on the current position of the entity and its strength in-market.
This approach benefits our clients by allowing them to make early decisions on which high value acquisitions to pursue and which to reject prior to significant management or external specialist time and expense being incurred
Preliminary target reviews
Once a target is identified there is often value in undertaking an initial assessment of the key value drivers with the support of the target i.e. with data and information provided by the target.
For these investors Temple will undertake a structured preliminary target review whose outcome is a view, from the acquirer’s perspective, of the key value drivers in the investment. For example, we can identify potential cost saving synergies through integration, increased sales through sales channel alignment or improved pricing through removal of competition.
This approach benefits our clients by allowing them to undertake go/no-go decisions prior to significant management or external specialist time and expense being incurred through the formal due diligence process.
Structured due diligence
Investors often seek independent advice on the target company prior to final bid.
For these investors, Temple provides a structured approach to commercial due diligence that will ultimately assist the investor in making an informed decision with confidence. We provide this support for both controlled auction and negotiated sale transactions. We will typically explore the company’s strategy in light of competitor, regulatory, supplier and customers trends as well as gaining an understanding of the company’s operations.
We are happy to manage the due diligence process but do not conduct the due diligence assessments typically performed by accountants, lawyers or other technical experts nor assume responsibility for the identification of specialist requirements, or for the scoping or outcomes of their work.
This approach benefits investors by providing an independent view on the commercial strategy and operations of a target and corresponding opportunities and risks.
Following acquisition, investors may require an independent view on the value creating opportunities within the acquired business in order to prioritise their efforts.
For these investors, Temple undertakes post acquisition diagnostics that assess opportunities to increase sales, decrease costs or reduce working capital. Example of outcomes include value captured through increasing throughput in a manufacturing plan, reducing working capital in a retail store or improving marketing spend effectiveness in a services company.
This approach benefits the new owners of these companies by providing a succinct summary of the opportunities within a business and the relative ease with which these opportunities can be captured. Ultimately this summary drives the programme of work that will increase the value of the new asset.
Creditors, investors and insolvency firms often lack specialist operational skills to identify and value opportunities for operational turnaround. In many cases operational efforts can yield significant and rapid results and impact the decision to sell or liquidate.
For these groups, Temple offers a rapid turnaround diagnostic service. Temple has deep experience in identifying value that can rapidly translate to cash where it exists and has provided this cost effective service to clients around the globe. We typically do this by working closely with management, staff, customers and suppliers to identify and prioritise opportunities for fixed cost removal, cost productivity, capital productivity and top line enhancement. Recent examples of turnaround diagnostics include:
- Increased topline through price optimisation in a retailer turning over NZD700m
- Throughput increase by better labour utilisation in a EU70m French business
- Rapid fixed cost reduction in a US debt funds originator
This approach benefits our clients by allowing them to rapidly assess the potential value and realisation timing of this value e.g. days, weeks, months and make early decisions on whether to liquidate or pursue a turnaround. In some cases the identification of value alone can enhance the value of a distressed business.