RSM Tenon | Case Studies | Revealing and reliable due diligence

The business

A provider of IT repair and re-utilisation services to original equipment manufacturers (OEMs) and IT support services to groups operating in the IT and consumer electronics industry. It has a fully managed service portfolio which incorporates a variety of technology specialisations, and includes retail and hospitality electronic point of sale (EPOS) systems, automatic teller machines (ATMs) and other banking automation hardware and management following on from an initial buy-out and separation from ICL.

The Business Challenge

A private business and leading funding institution was looking to invest in the business and approached the Corporate Finance team to conduct a full-scope due diligence review of the business operation and report on key transaction-related issues, risks and opportunities.

RSM Tenon's Approach

With a totally director led approach, RSM Tenon provided commercial, financial and management due diligence allowing the potential funders to get a full picture of the business they were looking to invest. Through the commercial due diligence, the management team were interviewed to gain first hand information about the company’s overall business direction and strategy. The strategic rationale of the management assumptions underpinning the business plan was tested by examining factors influencing:

• The stability of the businesses’ addressable markets
• Relationships with customers
• Competitive positioning versus market rivals
• The strength of the new business pipeline

Commercial diligence findings were fed through into the financial due diligence and sensitised, identifying issues that provided a platform to finalise negotiations and deal terms. The management due diligence involved one-on-one interviews with the management team and explored post-deal change in company organisation and structure together with strengths, development needs and cultural fit apparent in top management.

The Result

Following the delivery of the due diligence report and subsequent negotiations the buy-side deal structure was completed, and the MBO team was engaged in the future success of the company.

We have an open and honest working relationship with RSM Tenon built up over a number of projects, recognising the strength of their integrated reporting, and a director led approach which consistently adds value through robust conclusions and clear opinions.