Mergers & Acquisitions

With help from the Hinge Analytics team, our client was able to efficiently assess a potential M&A target, quickly establishing an appropriate valuation range for the potential target and identifying key diligence areas of focus and risk.

Background

Our client’s vision is to be a leading provider of specialized polymer materials and services. With deep operational expertise, the Company opportunistically pursues acquisitions that capitalize on its deep knowledge of formulations and polymer processing.

Project

The challenge was to rapidly assess the financial merits of a potential acquisition and to quickly identify any key areas of concern. Working on an abbreviated timeline, the Hinge team conducted extensive diligence with the potential target's management team before designing and building a detailed, yet flexible, operating model. We then performed a robust combination analysis, which allowed our client to easily analyze a variety of financing and operating scenarios. The analysis quickly established an appropriate valuation range for the target, limited downside risk and identified key diligence focus areas.

Client

Large Specialty Chemical Company • Large, Global Company

Goals

  • Assess potential M&A targets
  • Conduct target diligence
  • Design and construct bottoms-up projection model
  • Run pro-forma financial scenarios

Approach

  • Conduct target industry research to identify appropriate operational and valuation benchmarking
  • Review and design diligence process to facilitate a thorough understanding of the target's business
  • Determine appropriate model drivers and capitalization
  • Construct tools to easily analyze pro-forma operating scenarios

Results

  • Quickly established an appropriate valuation range for the target
  • Identified key diligence areas of focus
  • Limited downside operating risk exposure

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