Executing an Urgent Sell-Side Process
The Situation
A manufacturing firm, which had grown via acquisitions, needed core financial and operational analyses to support an urgent sell-side process after a surprise offer was made by a strategic competitor. In response, Accordion had a highly-experienced team on the ground in three days to begin work on sale-process support and a series of key analytical deliverables. Since the Company had scaled via acquisitions, all data (transactional, operational, and financial) resided in a variety of disparate systems. Our team performed the two most important pieces of analysis needed during the diligence process that the Company was unable to do based on the complexity of the analysis, size of data, and number of different systems involved: margin analysis and PVM analysis.
Services
Sell-Side Readiness
The Execution:
- Performed margin analysis to help the Company accurately measure profitability by product, end market, customer, plant, and salesperson that would fully tie the Company’s general ledger to its underlying transactional data.
- Built a series of margin tools for its primary business units and developed methodologies to integrate and allocate non-costed expenses.
- Executed PVM analysis to ensure that the Company was able to both track changes in raw material consumption through its vertically integrated manufacturing process and understand the direct impact of raw material price movements on profitability.
- Built several economic models that analyzed and attributed changes in raw materials purchases to changes in the price of fiber, volume of fiber purchased, and mix of fiber purchased using transactional level data.
- Reconciled transactional cost data with general ledger data to increase the visibility into this key driver of transaction economics for the potential acquirer.
The Results
Accordion developed and transitioned dynamic, robust and easy to update models which gave the Company insights on the margin analysis and the PVM analysis for the process. The Company was able to compare and assess profitability by various factors, view profitability trends, and accurately attribute changes in input costs to changes in specific cost drivers for use in integration planning on an ongoing basis.