Guidance for targeted acquisitions

Situation

Avanti was asked to help the portfolio companies acquire companies that strategically fit the investment company’s growth ambitions. Upon Avanti's recommendation in the previous evaluation, the client opted against proceeding with the acquisition of [Company A]. Instead, they tasked Avanti with evaluating two alternative candidates, [Company B] and [Company C]. The motivation behind the potential acquisition was to establish a strong presence for the client in the Nordic market. The objective was to approach the target companies with an offer and complete the transaction promptly.

Solution

The comprehensive analysis involved three key components: Financial Due Diligence, encompassing income statement and balance sheet analyses, along with valuation using three distinct methods to ascertain the company’s true value. The methodology included a mix of desk research, benchmarking, and interviews, focusing on various stakeholders in the Swedish value chain. Data sourcing encompassed external resources such as company webpages, annual reports, the Swedish Central Bureau of Statistics, and other official agencies in Sweden.

Result

Avanti's analysis culminated in a positive recommendation, giving a "green light" for the potential acquisition of the two target companies. Following the thorough analysis, Avanti further supported the client in extending offers to the identified target companies.