Manufacturing · Consulting
Buy side due diligence and post merger integration for a mid market acquisition
Buy side support for a packaging manufacturer acquiring a smaller competitor, from financial and operational due diligence through the first hundred days after closing. Diligence, the issues list and the integration plan all ran in one Synerger workspace shared with the client's deal team and advisers.
- Client
- A mid sized flexible packaging manufacturer in Gujarat acquiring a regional competitor in Maharashtra
- Region
- India
- Sponsor
- Managing director and the group CFO
- Duration
- 6 weeks of due diligence, then a 100 day integration programme after closing
Engagement model
FDE: Forward Deployed Engineering
Our consultants worked inside the client's deal team from the first data request to the hundredth day after closing, alongside their lawyers and chartered accountants.
How FDE worksThe team
- Engagement lead1
- Financial due diligence consultant2
- Operations consultant1
- Data and dashboard analyst1
- Integration project manager1
The challenge
Where things stood
- The target's books were kept in Tally across three entities, with related party transactions between them that the seller's summary did not show clearly.
- Customer concentration and the terms of the largest supply contracts were not visible from the information memorandum.
- The acquirer had not done a deal before and had no fixed way to track open diligence questions across lawyers, accountants and its own team.
- Once the deal closed, two plants with different costing, purchasing and payroll practices had to work as one business without losing customers.
The approach
How we ran it
Week 1
Set up the deal room
Opened a Synerger workspace for the deal with the data request list, a document room for the seller's files and a question log that the client's lawyers and accountants could also use.
Weeks 1 to 5
Financial and operational diligence
Rebuilt three years of monthly accounts from the Tally exports, tested quality of earnings and working capital, reviewed the top customer contracts, and walked the plant with the operations head to check capacity and maintenance.
Weeks 5 to 6
Findings and deal terms
Wrote the diligence report with each finding rated and linked to its evidence, and worked with the client's lawyers on the price adjustments, warranties and conditions before closing that followed from it.
Day 1 to day 100 after closing
100 day integration
Ran an integration office with weekly reviews: customer communication, a common chart of accounts, combined purchasing for key resins and films, payroll alignment and a shared monthly MIS.
What it looks like
Representative screens
Drawn to show the kind of system we delivered. Client screens and data stay private.
Integration office, day 45
Not started2
- Common vendor master for resin suppliers
- Single gratuity trust
In progress3
- Chart of accounts mapping in Tally
- Payroll alignment, Nashik plant
- Joint visits to top 10 customers
At risk1
- Customer consent for contract novation
Done2
- Day 1 letters to staff and customers
- Combined bank mandate
What we delivered
Modules and features
- Synerger deal workspace with data request tracker, document room and question log
- Quality of earnings and normalised working capital analysis from the target's Tally data
- Customer concentration and contract review for the largest accounts
- Plant visit report on capacity, maintenance backlog and safety
- Due diligence report with rated findings and links to evidence
- 100 day integration plan with owners, milestones and a weekly status dashboard
- Combined monthly MIS dashboard for both plants in Power BI
What changed
Outcomes
- The client went into final negotiations with every material finding written down and backed by documents
- Issues raised in diligence fed directly into the price adjustment and warranty clauses
- Both plants reported on one chart of accounts and one monthly MIS within the first hundred days
- The deal team, lawyers and accountants worked from one shared question log
Technology used
Looking back
The Tally data was in better shape than expected, but the inter company entries between the target's three entities took a week to untangle, and we would ask for those ledgers in the first data request next time. Putting the lawyers and accountants on the same question log was the change the client valued most, though it needed some persuasion in the first week. On integration, we started purchasing and finance together and should have put customer visits first: one large customer heard about the deal from a competitor before hearing from the client, and that took effort to repair.
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