Cases

Conducting a Strategic Diligence of the Hydraulics Cylinder Market for a Private Equity Company

Challenge

The client, a large private equity firmis one of the pioneers in the Asian buyout market. The client had an insight that the increasing demand for tipper trucks due to growth in infrastructure and mining activities would lead to a greater demand for hydraulic tipping solutions. Thus, it was looking to invest in an international hydraulic tipping cylinder manufacturer with significant presence in India. However, the client requested UCto assist in providing insights into the potential market growth for front end tipping solutions of the hydraulics cylinder market.

Our Approach

To conduct a strategic diligence of the hydraulics cylinder market for the client, UC adopted the following approach:

  • Assessed the demand for tipper trucks from various industries such as mining, infrastructure, construction and waste management
  • Conducted interviews with key opinion leaders across different end user industries, commercial vehicle OEMs, bodybuilders and competition
  • Forecast the potential market for tipper trucks based on market feedback
  • Triangulated findings by conducting regression analysis using the growth in construction equipment as proxy to forecast the potential market for tipper trucks

Impact

The client received an in-depth understanding of the underlying markets that drive the growth of tipper trucks and the potential market for tipper trucks over the next 5 years. A market feedback on the company and the potential threats faced in the market was also clearly addressed by UC. Ultimately, supported by the insights from the engagement, the PE client bought the target company for 525 million euros.