Client Situation
Our client is a large well known private equity firm headquartered in the US. It has over $75 billion in assets under management and about 900 employees located in the US, Europe and Asia. In the case of this project, Cedar worked with the firm’s headquarters in the US. The client was interested in making an offer for a top tier supplier of high density polypropylene (HDPE) plastic packaging. The client wanted to quickly and completely understand the North American market and technologies of HDPE packaging, equipment and competing materials and technologies. This information and analysis would be used in the client’s bid proposal and offer, if required.
Cedar’s Approach
Cedar was mandated to provide detailed technology and market due diligence analyses of the North American market and technologies of HDPE and PET, its main competing packaging material. Cedar also benchmarked the investment target to other packaging companies.
- Collected primary and secondary information on end uses of HDPE and PET packaging, machinery type used and other operational issues.
- Interviewed packaging end users, competitors and others.
- Worked with our client to determine the future prospects of the target company and HDPE packaging.
- Created an Excel database forecasting the plastic packaging market covering materials, manufacturing technology used and end use applications.
- Completed all of the work in 2 weeks.
- Assisted in conference calls with other investors joining with our client.
Outcome
The program resulted in our client’s acquisition of the HDPE packaging company for over $400 million. The results included
- Identified key threats and opportunities facing HDPE packaging in the future.
- Recommended actions and strategies necessary for the target company to out-perform the packaging market.
- Provided the client’s management with useful tools to manage the company.
- A successful completion of the transaction.