Scope of work
A pre-transaction commercial review examines the business assumptions behind a proposed acquisition or investment. We assess the market, customer base, competitive position and sources of revenue. The work identifies questions that could materially affect the commercial case and the evidence available to answer them.
The scope can also examine proposed synergies, integration dependencies and the operating requirements of the combined business. Findings distinguish observed information from management estimates and unresolved questions. This is management-consulting work; it does not replace legal, tax, accounting, investment or regulatory due diligence.
We agree the commercial questions, review available information and assess the assumptions most important to the transaction case. External research and management discussions are used within the agreed access and confidentiality arrangements. The report presents the evidence, sensitivities and open items for the client's decision process.
Questions to address
- The acquisition case depends on an untested market or customer assumption.
- Revenue concentration, renewal behavior or pricing quality is difficult to assess.
- Proposed synergies depend on operating changes that have not been specified.
- Available information leaves material commercial questions unresolved.
When to consider this work
- Assessment of a potential acquisition
- Commercial review of an investment proposal
- Testing a deal's growth or synergy case
- Preparation of integration priorities before completion
How we approach it
Set the diligence questions
Review the transaction thesis and available information. Rank the commercial questions by their potential effect on the decision and agree the boundaries of the assignment.
Examine the evidence
Assess the market, customer and revenue information. Test the assumptions behind the forecast and any proposed commercial or operating synergies.
Report implications and gaps
Explain the findings, sensitivities and unanswered questions. Identify further diligence or operating work that the client should consider before making commitments.