Services|M&A/Commercial Due Diligence

OVERVIEW

Stax has over 15 years of experience advising strategic acquirers and private equity investors ranging from mega-buyouts and take-private deals, to growth equity investing and distressed debt investors. Our clients work across industries with investments throughout the lifecycle and we’ve developed a robust process for taking fast deep dives. Having conducted hundreds of commercial due diligence projects and strategic engagements for portfolio companies, Stax has amassed substantial institutional knowledge by industry, generated tremendous contacts and relationships, and probably answered your question before in the same industry.

We are known for focusing on the need-to-know versus the nice-to-know. We build a bottom-up fact base with tremendous primary research and substantive data mining, so that clients have a solid set of facts and analysis with which to debate investment and strategic options. Yes, that means we’re comfortable with calling a bad deal when we see it, or with telling you when an investment has risks you shouldn’t take. We are fast out of the gate, and our teams can scale up or down to suit the investment.

Stax collaborates intensely with clients in the heat of a deal and has the only model that provides for a Deal Triage™—providing quick assessments of deals early in the process. Our job is to keep investors focused on the good deals, so that ideas of lesser value can be promptly eliminated. Our expertise and swift insights means that clients turn to us post-acquisition as well, to help hone the ideas they have for their new companies, and to frame the critical first steps through our 90 day plans.

 AREAS OF EXPERTISE

  • 90 Day Plans
  • Acquisition Strategy & Screening
  • Competitor Landscape
  • Customer Insights

  • Deal TriageTM
  • Due Diligence
  • Exit Planning
  • Management Team Support
  • Quality of Management Forecasts

Examples of Engagements:

  • Industrial, Distribution and Manufacturing. Supporting an upper middle market private equity firm looking at an industrial product, Stax assessed trends in the three end-markets, gauged channel dynamics, obtained dealer perspectives, and mapped the competitive landscape. Despite the target company’s relatively good brand strength, Stax determined that the capital cycle was at peak for two of three segments; that many customers would soon see a downturn in ability to spend; and that the channel had been overbuilt and over-stocked. We advised the Client against the investment and in two years the client thanked us for helping “dodge that bullet,” as this company went bankrupt within 24 months of the assessment.
  • Technology . In support of a PE Firm’s potential investment in a company providing software to the transportation industry, Stax determined the size and stability of the target company’s market in the U.S., across Europe, the Middle East and Eastern Asia. We further identified trends in products, technologies and delivery among players within the market, and how an “end-to-end” strategy for supply chain products may develop. The company has since grown considerably and the exit plan is looking strong.
  • Business Services. As part of a due diligence on a business service provider, Stax helped to: evaluate customer account satisfaction with the provider’s service and the perceived value of its programs; gauge customer loyalty and the likelihood of switching to competitors or bringing the function in-house; elicit reasons for customer defection and potential enhancements to service offerings; and determine prospects for account renewal and opportunities to grow account spend through additional subscriptions or expanded products.
  • Healthcare. Stax conducted an early stage, rapid evaluation of the revenue cycle management (RCM) market in healthcare, as well as a review of the target company’s market position. We quickly provided the Client with an understanding of: current use of RCM services in hospitals, key issues and concerns related to RCM; the perceived value of an integrated “end-to-end” RCM solution and hospitals’ level of interest in such a product; the elements of the outsourcing decision; and perceptions of the target company and its competitors. Over the course of seven days, Stax conducted interviews with 30 hospitals, focusing on discussions with CFO’s, VP’s of Finance, Controllers, Revenue Cycle Directors, and other finance leaders. To provide the Client with a complete picture, we also sought feedback from current customers of the target company.
  • Consumer Retail. On behalf of a leading PE client, Stax assessed the current market standing and growth outlook of a producer of baby goods. Specifically, we helped the client understand how retailers’ strategies may differ with regard to the baby department and how the target’s position differs by retailer, how the baby products department performs for retailers, and what changes—if any—retailers propose that may impact the target company’s sales going forward. Our assessment also looked into the target company’s position vis-à-vis competitors in key product categories, and the reasons for market share changes.

OPINIONS

With nearly two decades of experience across varied sub-sectors and geographies, Stax is able to analyze the latest market trends in real time. See more case studies.

For recent opinions, also visit our blog.

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