Strategic M&A transactions and acquisitions are rarely straightforward. However, diligence that provides practical insights, uncovers insights and removes obstructions can create a win/win scenario so that private equity, lenders and the target company all benefit.
In this case study, we explore the relationship between our client, a Private Equity Fund Manager and its relationship with a logistics giant, with the Hilco team delivering an independent diligence services assignment.
Our Private Equity Fund Manager client specialises in investing to rebuild great businesses. Their focus is on transforming operational performance and creating value in companies that are currently struggling but have turnaround potential. One such company, was one of the largest providers of time sensitive freight and freight forwarding services in Australia and New Zealand. Seeing the potential, our client planned to acquire and transform the business.
Their top priorities were to attract investment from funding partners and to identify improvement opportunities. They identified the Accounts Receivable asset class to leverage and required a detailed, independent diligence exercise to confirm the availability of the receivables and construct a borrowing base. For this highly specialised requirement, they needed in-depth expertise, and turned to Hilco Global.
Hilco completed a deep dive into the accounts receivables, drawing on experience working with many global organisations with multiple operating companies, multiple lines of business and across international jurisdictions. The result was detailed evidential data that provided our client with three essential outcomes:
In business, the ability to frame a problem is important, but the real value comes from being able to develop a solution. In carrying out this deep-dive diligence on the acquisition target Hilco did both.
Raising capital or sourcing debt is a challenge, especially when there is inherent uncertainty surrounding liquidity and cash run rates. Hilco’s diligence and recommendations made a material difference in helping our client attract supporting investment for this acquisition. Our insights assisted them in securing receivables funding which ultimately facilitated the business transformation.
Hilco APAC is a trusted partner in the valuation of tangible and intangible assets and the verification of these assets for a wide range of lending, financial sponsoring and strategic business activities. We work with clients who need our independent, accurate and time-critical reports to help manage their critical financial decisions and negotiations.
Find out more about we assist lenders and investors with a range of diligence services by contacting our team today for a confidential discussion.