The Assignment / Client’s Problem

  • To support the potential acquisition of a subsea equipment provider, including evaluation of the robustness of the Target and its business plan
  • Provide an overview of the addressable market size and outlook, relevant to the Target’s current product and service provision
  • Evaluation of overall business case in order to identify key risks associated with the prospective acquisition

Westwood’s Approach & Analysis

  • Segmentation of the Target’s historical revenues by product line and sector, identifying key business levers and customer concentration/exposure
  • Employment of proprietary in-house offshore and subsea data enabling the generation of bottom up forecasts of relevant addressable markets
  • Competitive landscaping of similar providers in the supply chain, comparing the breadth and depth of manufacturing capability and service offering with the aim of identifying and validating its unique selling proposition
  • Detailing typical routes to market for subsea providers such as the Target in accessing its customers – direct access vs indirect access to end users
  • Comprehensive review of the degree of vertical integration of its core customer group, and the identification of perceived gaps in the supply chain
  • Review of the Target’s  sales and marketing  process  impact, the competency of its current resourcing, and its R&D plan

The Outcome & Benefit

  • Target is well aligned to growth markets but needs to focus on improving its commercial capability in order to fully capitalize on its R&D efforts
  • The report outlined key customers based on forecast requirements, effectively serving as a shortlist for business development efforts
  • Recommended to hold off on the acquisition given the reactivity of the Target’s business model and it’s lack of product focus. The misalignment in management motivation also proved to be a concern