Operational Due Diligence

$348M Packaging Company

Background

  • Diversified, vertically integrated flexible packaging solution provider with 9 facilities across North America
  • Deep tenured relationships with blue-chip customers
  • Extensive and sustainable product portfolio with innovative and proprietary solutions

Contributions

  • Provided a comprehensive due diligence report to the sponsor
  • Supported investor needs with extensive industry analysis, target’s market position, facility maturity and lean progression, legacy business integration, and executive management review and opinion
  • Reviewed target’s capital spend and evaluated future growth and maintenance capex estimates and EBITDA impacts
  • Developed preliminary 100-day plan to detail the execution strategy behind operational initiatives during the first year of new ownership

Results

  • Provided the target with the findings below to help support their investment decision and buying process:
    • $15 – $25M inventory can be reduced not only from COVID and Supply Chain disruptions, but through enhanced inventory management practices
    • $2M in resin savings from supplier renegotiation
    • $1M in EBITDA improvement through S&OP & SIOP development and tactical MTO FG reduction; eliminating the need for Outside Warehousing
    • Multiple ERPs limit the ability to optimize planning, and production
    • Supply Chain team is lacking analytics skillset needed to drive best in class S&OP processes
    • Lack of single source of truth limits team’s ability to optimize sourcing and supply activities or track KPIs across operations