Identifying Potential Acquisition Opportunities for a Rubber Component Manufacturer

distribution

Client Challenge

The client was a rubber component manufacturer, primarily catering to the commercial vehicle segment in the domestic and export market. The client did not have any presence in the passenger car segment and wanted to build new customer relationships and the capacity to cater to the same. They wanted to increase their export revenue through new customer relationships and new product lines. The client approached UC Strategy to identify, evaluate and select suitable partners for a potential acquisition and to identify product lines that would find synergy with the client’s operations and line of activities. The engagement also involved benchmarking key business indicators of the client, the potential companies in the space.

Our Approach

UC Strategy listed potential partners and product lines based on the following process:

  • Conducted secondary research on 17 companies involved in the manufacturing of rubber components for the automotive industry, which included mapping the companies on various parameters –
    • Management
    • Product lines
    • Manufacturing facilities
    • Customer segments
    • Positioning in the market
    • Financials
    • Key business indicators
  • Conducted primary research with 17 companies to understand their willingness to divest, or an opportunity for alliance
  • Shortlisted companies which were the best fit with the strategy, operations and organisation of the client, based on the following –
    • Willingness to divest
    • Synergies with product mix
    • New market access and new customer relationships
    • Performance on key financial and operational ratios –
      • Revenue CAGR, Margins, ROCE & ROE
      • Interest coverage, debtor days, Inventory Turnover
      • Initiated further contact with shortlisted companies for divestment.

Our Impact

The client received a list of the best fitting companies based on the predefined criteria.

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