Strategic Diligence of a Telecom Cable Manufacturing Unit in India being Acquired by a European Firm
The client, a leading fibre optic and metallic cable manufacturer in the world, decided to acquire an Indian manufacturer of telecom cable in order to gain a lower cost manufacturing base and to benefit from the growth of optic fibre cable demand in emerging markets. The client has already signed a memorandum of understanding with the target and requested UC to conduct a strategic diligence study of the target to support its acquisition.
To study strategic diligence of the target to support the acquisition, UC adopted the following approach:
- Assessed the outlook of the Indian market
- Analysed trends in key customer segments and mapped the competitive landscape
- Analysed target company’s market position
- Based on the above, assessed the sustainability of the target company’s revenues and margins and validated the target’s management revenue projections.
The client obtained a realistic assessment of the Indian market and the target company’s position. UC also identified assumptions, key risks in the target’s growth plans and the potential upsides of the target company. The client also obtained inputs on some operational aspects they will face, post-acquisition.