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Due diligence of a major FMCG distributor in Poland

  • Industry

    FMCG distribution

  • Geographical coverage

    Poland

Consulting Project - PMR Consulting - other industries, retail/FMCG

Client's need

Our client was in the process of acquiring the majority stake of one of the leading Polish non-FMCG distributors. The client was looking for a consulting company to provide a comprehensive due diligence study that emphasized all potential transaction risks that might have an effect on future EBITDA sustainability. Thus, the potential transaction risks needed to be taken into account on Equity Value confirmation at the SPA level. The client was also interested in understanding potential opportunities stemming both from future commercial, operational, legal and financial developments as well as from current inefficiencies.

Our deliverables

PMR provided the client with a comprehensive study that covered four key business aspects:

  • Commercial performance (commercial due diligence) – PMR assessed market potential and saturation, target market penetration and potential for further expansion. The PMR team also analysed distribution patterns, the competitive environment including industry benchmarks and captured reputation on the market. Moreover, PMR created an econometric forecast for market development.
  • Operational performance (operational due diligence) – PMR analysed the client’s current operational setup including the sales process, logistics, workforce, concentration and retention of the client and client’s suppliers, working capital performance including identification of receivables, and stock quality issues.
  • Financial and tax performance (financial due diligence) – PMR and its partner analysed the last three years of client’s financial, accounting and tax policies including financial statements reporting, tax management, EBITDA normalisation, key assets, and liabilities verification.
  • Legal performance (legal due diligence) – PMR together with its partner executed an analysis of the legal situation of the target including corporate laws, ownership structure and subsidiaries relations, key suppliers, non-balance sheet obligations, as well as contracts for client, partners and employers.

Value for the client

As a result of the due diligence project conducted by PMR consultancy, client could mitigate all identified risks, the level of valuation modification, and the inclusion of appropriate representations and warranties to the final investment agreement.

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