Due diligence | business
The key to a successful acquisition is detailed research. And that means more than reviewing fi nancials. AMI’s Noru Tsalic says
investors today are increasingly calling on expert consultants to identify potential risk – and hidden opportunities
Moving beyond the numbers game
One of the most important elements in any successful merger or acquisition is doing the groundwork – fi nding out about the target’s business plans and testing whether those plans really stack up, says Noru Tsalic, vice president of consulting at Applied Market Informa- tion (AMI). This so-called ‘due diligence’ work can no longer be viewed as simply checking the numbers; it increasingly calls for expert commercial and technical expertise in order to validate critical market assump- tions, assess the match of technical capability to customer demands, and identify whether a business’s physical and human resources are suffi cient to deliver promised returns. With its long track record in plastics processing
industry consulting and research, together with its detailed understanding of polymer markets, AMI Consulting is well positioned to undertake commercial and techno-economic due diligence projects for
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companies planning major investments and acquisi- tions. Recent projects completed by the company include major deals in the compounding, masterbatch, pipe, PET preform production, BOPP and PE fi lm sectors, says Tsalic. “Any time there is an acquisition, there is the need to
complete due diligence,” says Tsalic. “The reason is simple. Acquisitions are fi nanced by other people’s money – typically banks and private equity. These sources of funding increasingly want a commercial due diligence investigation in order to protect their invest- ment. It’s an insurance policy. Increasingly, manage- ment, too, see due diligence processes as an important tool to measure and manage risk.” On the vendor side, commercial due diligence aims
to test, corroborate and validate a company’s strategies and business plans. “Obviously, fi nancial due diligence is extremely important – one simply cannot make an
October 2014 | PIPE & PROFILE EXTRUSION 39
Main image: Effective
technical and commercial
due diligence is about using
expert market understanding to identify risk and expose potential
opportunities
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