Operational Due Diligence of Add-On Business

$250M Food Manufacturer

A client’s opportunity to acquire a competitor, required a detailed examination of operation under unique circumstances
The Target, a food manufacturer specializing in Latin foods, faced relocation of is manufacturing operations as the business owners decided to exit the business and sold the property where the site was located
The client sought to conduct a thorough due diligence to gain a nuanced understanding of the challenges, risks, and opportunities associated with the acquisition

Performed site inspections at all manufacturing facilities
Constructed a capacity model to understand what and how existing equipment could be leveraged in the execution of the volume shifts
Constructed a logistics model to understand the financial impact on freight costs from the volume relocation
Developed a list of capital requirements to materialize potential volume shift scenario
Outlined and quantified all drivers of synergies in the best scenario

Quantified total synergies in the magnitude of $13M – $18M from the execution of the integration
Estimated costs to execute the relocation of manufacturing operations including rough estimated for new plant construction in the magnitude of $40M to $60M
Determined viability of proposed scenarios which favored further leveraging contract manufacturing operations and optimization of secondary site in the network