Early, detailed, and rigorous transaction screening can yield
significant dividends in the appropriate deployment of fund
professionals’ time and the ultimate success of each deal.
(McKinsey & Company)
Every investment opportunity is not worth the same to every potential buyer. Therefore, the preliminary diligence done on each opportunity must be tailored to the private equity fund considering the investment. When operating value must be created, additional diligence work is needed to determine whether the opportunity is in alignment with how the private equity company can best create value.
The investments that are the real gems are those that would yield a greater return in the hands of the company considering the investment than in the hands of another buyer.
In working with your in-house due diligent team, The RobinsonEdwards Group will take a strategic look at each opportunity to assess its alignment with the funds goals, ability to leverage the expertise and interest of the fund management team, synergies with other portfolio companies.
Benefits of Preliminary Diligence Phase
- An understanding of how well the investment opportunity aligns with how the private equity company prefers to and is capable of creating value
- Identification of skills that would need to be acquired or beliefs that would have to change in order for the private equity firm to be able to maximize the opportunity presented by the investment option
Serve as part of the in-house due diligence team to assess investment opportunities from a strategic perspective
- Create an initial profile of the private equity firm to serve as the basis for the evaluation of potential investment opportunities
- Review investment package from investment bankers and make a strategic assessment
- Support meetings with the management team and others as necessary
- Provide recommendations on whether to move to the next phase of diligence based upon initial assessment of ability to drive value in an advantaged manner