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Case Study: Buy-Side Diligence

SITUATION
  • A Private Equity (PE) firm was considering to bid on a US-based provider of sales and marketing software solutions targeted at Destination Marketing Organizations (DMOs), entities promoting tourism in a given geography

  • While the target was the clear market leader in the US, it had limited presence and traction abroad and hence, one of the main future growth drivers highlighted in the CIM was international expansion, particularly in Europe

  • Engaged by the PE firm to vet the target’s growth potential in Europe

SOLUTION
  • Developed an overview of the European DMO Market:

    • Laying out the overall structure, staffing model and funding,  by aggregation level (e.g. region, city, etc.)

    • Profiling and contrasting operating models of DMOs in Europe vs. the US

    • Estimating the count of DMOs by country and aggregation level

    • Identifying the largest countries for deep-dives

  • Ran deeper-dives on the market for the target’s solutions:

    • Routes to market

    • Key Success Factors

    • Competitive landscape

    • Market sizing and forecast

    • Expert interviews were conducted to support the analysis

  • Derived perspectives around the target’s growth potential in Europe:

    • Revised the Management forecast

    • Provided recommendations to augment the base case forecast, i.e. aligning better with KSFs, focusing on certain geographies and pursuing specific M&A opportunities to accelerate market penetration

OUTCOMES
  • Enabled the PE firm to validate the thesis around international growth potential

  • Also enabled the firm to augment the investment case, with the identification of  organic and M&A-driven value-creation opportunities

  • Approval from the Investment committee to move forward with the process

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