From the perspective of most Private Equity companies the commercial due diligence (CDD) plays a special role within the deal cycle. In contrast to other types of due diligence (e.g. financial due diligence, operational due diligence, legal due diligence) the commercial due diligence analyses the strategic rational of a transaction and assesses comprehensively the sustainability of the target’s business model. The core areas of a commercial due diligence are typically:

– Business model (e.g. value creation, value chain activities, profit model)

– Market environment (e.g. market segmentation, size and growth)

– Customer portfolio (e.g. dependencies, purchasing and supplier changing behaviour, customer potentials)

– Competitive landscape (e.g. financial benchmarking, strategic positioning)

– Business Plan (e.g. planning assumptions, price-volume grid, upside potential)

– Additional areas depending on customer focus (e.g. exit options, buy & build strategy, business case)

Commercial Advisory examines the sustainability of the target’s business model and its ability to succeed in future. The emphasis of our work lies on the assessment of the achievability of the sales and gross margin planning. For this purpose we integrate the results of the market, customer and competitor analyses into our analysis and consider the internal sales and marketing ressources given to support the planned growth. Commercial Advisory’s focus is on future-oriented and forward-looking valuations and approaches rather than on descriptive and historic illustrations. Commercial Advisory has access to the most important research databases and conducts comprehensive interviewing programs with industry experts, customers and non-customers, competitors and suppliers to get the full picture (“360 degree approach”). Commercial Advisory provides its expert network to every client.