Commercial due diligence case study

How one organization evaluated a specific deal in the telecom industry


The issue: The client needed to evaluate whether its acquisition target was able to achieve projected international long distance (I-LD) pre-paid card revenue and profit.

Our approach: We developed market growth analyses for the I-LD card market and evaluated the feasibility of the target’s implied market share gains. We also identified margins earned by competitors in the I-LD market and drivers of differences.

The outcome: The target’s revenue projections implied taking significant market share in a price-driven, slow-growth market where the incumbents had established distribution relationships. We found that the margin differences were driven by size and resulting pricing power and the margin projections were unlikely given they would exceed those of the target’s largest competitor. With this knowledge, the client was able to renegotiate the terms of the merger agreement.

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