My basketAcquisition Studies
The following accounts give examples of recent ACQUISITION STUDIES completed by Roskill Consulting Group. To protect confidentiality, client names & identifying data have been omitted.
Due diligence on a filler mineral operation
Assignment
Roskill was retained to perform commercial due diligence on the purchase of a talc mine. The client, an equity house, required a critical assessment of the business plan, a review of the competitive landscape, an assessment of price dynamics and profiles of the major customers.
Approach
The initial stage of the work provided an overview of global resources, supply and demand. It also addressed the way in which the different mineralogy of talc minerals from sources around the world determines the applications for which it is used. The research then focused on the specific geographic and end-use markets for the talc produced in the target operation, including factors affecting future demand such as the requirement for increased paper coating performance, developments in printing technology, competition from other coating pigments and competition from uncoated papers. The possibility of working with a Chinese company to supply talc grades for use in the growing plastics market was also investigated. The review also included a review of corporate control of talc supply in Europe, the competitive environment, and price dynamics.
Result
Results of the study were presented to the client in the form of a written briefing. Roskill also undertook several Q & A sessions with potential investors. The report highlighted the fact that the target operation had crystallographic and location advantages over possible competitors. It also addressed the very competitive nature of the paper industry in Europe and the possible limitations for growth. The client proceeded with the purchase.
Due diligence on an industrial minerals operation
Assignment
Roskill was retained by an investment house to perform commercial due diligence on the industrial minerals division of a leading mining company. The client required a critical review of the market aspects of the vendor due diligence document and an independent assessment of supply, demand and prices for the two industrial minerals concerned.
Approach
Roskill provided detailed supply, demand, trade and price histories for the two minerals concerned and followed this with ten year forecasts of supply/demand balance and prices. An in-depth evaluation of competitor companies was provided as well as a review of regulatory controls affecting the production and use of the minerals.
Result
A Roskill director formed an active part of the potential investor’s team that met with the vendor’s management to explore all the issues arising from the VDD and our own research. The sale did not go ahead.
Preparation of document to form part of a VDD presentation
Assignment
The client required a review of key sector trends in the form of a series of commodity-based reports identifying the main factors affecting the markets, including current and forecast global supply and demand, competitive position of group companies, main competitors and the robustness of raw material supplies. The commodity sectors to be covered included a light metal, a ferroalloy, an electronic metal and metal furnaces.
Approach
Roskill built up a detailed review of the sectors under review by drawing on desk research and field interviews to provide up-to-date evaluations of trends in each industry as well as obtaining information on the standing of group companies in the market. Roskill also undertook lengthy and in-depth interviews with the main group companies to position them in their industry sectors and to validate the group’s internal market assumptions and projections.
Results
The client was provided with an independent evaluation of the industry sectors in which it operates. The group listed on a European exchange some 4 months after the completion of our study.
