Due Diligence Case Study

The Challenge

Our client was a leading Private Equity firm looking to acquire a manufacturer of capital equipment. The target company had two substantial manufacturing operations in Australia, one in the Middle East and key suppliers in China and India. TXM were engaged to assist with technical due diligence including assessing risks and opportunities in the manufacturing operations and the overall supply chain. We also did an on-site assessment the China supplier and the risks and opportunities posed by that relationship.

The Solution

TXM’s core business as Lean consultants enabled us to be presented to the target company in a way that provided us a high degree of access. TXM completed our Total Excellence Benchmark diagnostic review on all three sites to provide a consistent means of assessing the three sites. We used Value stream mapping to map the end to end supply chain flows. We then completed detailed on-site assessments of each site and interviewed all key management staff. 

The Results

The TXM team identified around $20 million in opportunities that the target was not aware of, mainly through better supply chain design and better leveraging of existing in-house capabilities. Our bilingual Chinese consultant identified critical flaws in the client’s China outsourcing strategy, which could have caused serious value destruction if not corrected. We assessed and identified key risks and opportunities in quality, safety and intellectual property. Our client valued our detailed, knowledgeable and pragmatic assessment of the manufacturing operations and the supply chain. Our report proved to be a critical input in to our clients’ final assessment of the value of the target business.