Case study · Mergers and acquisitions
Buy side due diligence and post merger integration for a mid market acquisition
A mid sized flexible packaging manufacturer in Gujarat acquiring a regional competitor in Maharashtra. Diligence, the issues list and the integration plan all ran in one Synerger workspace shared with the client's deal team and advisers.
- Acquirer
- Flexible packaging manufacturer, Gujarat
- Target
- Regional competitor, Maharashtra
- Engagement
- Forward deployed
- Practice
- Mergers and acquisitions
- Weeks of diligence
- 6
- From the deal room opening to findings and terms.
- Days of integration
- 100
- An integration office with weekly reviews.
- Entities in Tally
- 3
- With related party transactions between them.
- Question log
- 1
- Shared by the deal team, lawyers and accountants.
The challenge
What made this deal hard.
Engagement: forward deployed. Six weeks of due diligence, then a 100 day integration programme after closing.
The target's books were kept in Tally across three entities, with related party transactions between them that the seller's summary did not show clearly.
Customer concentration and the terms of the largest supply contracts were not visible from the information memorandum.
The acquirer had not done a deal before and had no fixed way to track open diligence questions across lawyers, accountants and its own team.
Once the deal closed, two plants with different costing, purchasing and payroll practices had to work as one business without losing customers.
The approach
Four phases, from screening to Day 100.
- Week 1Set up the deal room
- Weeks 1 to 5Financial and operational diligence
- Weeks 5 to 6Findings and deal terms
- Day 1 to day 100100 day integration
Phase 1 · Week 1
Set up the deal room
Opened a Synerger workspace for the deal with the data request list, a document room for the seller's files and a question log that the client's lawyers and accountants could also use.
Phase 2 · Weeks 1 to 5
Financial and operational diligence
Rebuilt three years of monthly accounts from the Tally exports, tested quality of earnings and working capital, reviewed the top customer contracts, and walked the plant with the operations head to check capacity and maintenance.
Phase 3 · Weeks 5 to 6
Findings and deal terms
Wrote the diligence report with each finding rated and linked to its evidence, and worked with the client's lawyers on the price adjustments, warranties and conditions before closing that followed from it.
Phase 4 · Day 1 to day 100
100 day integration
Ran an integration office with weekly reviews: customer communication, a common chart of accounts, combined purchasing for key resins and films, payroll alignment and a shared monthly MIS.
The hundred day plan
Workstream by workstream, each milestone dated and owned.
- Step 1CustomersCommunication
- Step 2AccountsOne chart
- Step 3PurchasingResins and films
- Step 4PayrollAligned
Drawing with sample data
Outcomes
What changed for the client.
- The client went into final negotiations with every material finding written down and backed by documents
- Issues raised in diligence fed directly into the price adjustment and warranty clauses
- Both plants reported on one chart of accounts and one monthly MIS within the first hundred days
- The deal team, lawyers and accountants worked from one shared question log
Next step
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