What was the goal?
An African based private equity initiated a due diligence exercise on Med-OpticsVision Centre , an optic healthcare provider in Uganda since2002. This case study delves into the specific parameters guiding the due diligence process. It sheds light on the challenges faced by the search fund and the strategic considerations underlying their assessment of the company's potential for growth and strategic alignment. Due diligence parameters included:
They sought the expertise of Afrorian to seek expert opinion and support in due diligence.
Due diligenceparameters included:
- Market assessment and commercial due diligence to understand the service-portfolio level targeting of the company under consideration.
- Top-selling services in terms of volume and pricing (margins) and their sustainability levels.
- Competitor landscape and its impact on pricing and margins.
- Current valuation estimates vis-a-vis future growth estimates.
Solution:
Afrorian understood the highly quantitative nature of the requirement and offered in-person meetings with experts to address the objectives of the private equity. Some of the experts onboarded were:
- Former head of a leading eye care company in Uganda. The expert was instrumental in sharing deep insights on this subcategory, services to be targeted to garner the highest margins, marketing strategies employed by significant players, and finally, the product pricing models.
- Former manager & New Product Introduction at a leading optic online store. The expert provided specific insights into scenario generation, growth prospects, sustainable revenue streams, and supply chain and logistic aspects, including inventory management.
- Independent financial consultant with deep expertise in valuing e-commerce companies to help arrive at the best measure of company fair value as well as capital allocation strategy for our client.
Results:
Afrorian helped the client to gain first-hand perspectives and actionable insights into the company's due diligence parameters.
- The financial expert shared his perspective on the market and commercial due diligence to understand the product-portfolio level targeting of the company under consideration.
- Other selected experts shared their perspectives on top-selling products in terms of volume and pricing, the competitor landscape, and its impact on pricing.
Summing up
The expert insight provided the search fund with additional market and commercial considerations to support the fund’s decision. insights received considerably changed the original perspective governing the fund’s due diligence parameters.
