Assessment of a High-Pressure Equipment Provider

Assessment of a High-Pressure Equipment Provider

June 18, 2020
June 18, 2020

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Commercial Due Diligence (CDD): High-Pressure Equipment Products


Client and project overview

  • A New York-based private equity firm wanted to assess the attractiveness of a leading provider in high-pressure equipment, as part of its acquisition due diligence process. The company assessed was a manufacturer of mission-critical valves, fittings, and tubing for use in high-pressure applications in industries such as oil & gas and waterjets.)


Key issues​

  • How fundamentally attractive are the company’s end markets?​
  • What is the company’s competitive position?​
  • What are the company’s growth prospects and what are the risks?​

Methodology highlights

  • Visited the facility before speaking with purchasers of high-pressure equipment on oil rigs and testing labs; waterjet OEMs; distributors; a range of competitors; and various market experts​
  • We drew on its flow control experience and combined these interview results with industry analysis. This allowed us to assess how the company’s products are purchased and the market drivers and trends which would impact the business

 ​

​Results​

  • Concluded that not only did the company operate in a fundamentally attractive market but its unique value proposition provided it with a sustainable competitive advantage within its major customer groups​
  • Our work uncovered key insights which proved critical to the acquisition process and were highly valued by both the private equity and debt sponsors to the transaction​
  • We also highlighted a range of “go-to market” actions that the business was able to implement subsequently 



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