Due diligence mitigates risk factors for M&A company, providing transparency on acquisition target and supplier base in China

Due diligence mitigates risk factors for M&A company, providing transparency on acquisition target and supplier base in China

The client is an M&A firm with more than 20 years of experience, focused on developing companies in close cooperation with skilled business leaders and industrial experts.

To date, our client has successfully completed over 45 platform acquisitions and over 100 add-on-acquisitions.

Opportunity

The client was considering an acquisition of a European company within the fast-growing technology sector.

In order to ensure a fully efficient supply chain and to avoid any unnecessary risks before the acquisition, ARC Consulting was hired to provide a comprehensive analysis of both the company to be acquired along with its supply base in China.

The analysis included:

  • Thorough evaluations on-site at the suppliers’ locations in China.
  • Identification of any potential irregularities and risks among the suppliers.
  • Detailed review of the organization potentially being acquired.

Approach

The team at ARC Consulting gathered the necessary data utilizing the following three methods:

A) Desktop research

The background data and information of the suppliers was collected via online research and database review in order to identify the legal status, ownership structure and production capability of each supplier.

B) Management interviews

Interviews and meetings with the potential acquisition company as well as its suppliers were conducted in China, focusing on strategy, organization, processes, and resources.

C) On-site visits

On-site visits were conducted to inspect and verify the production facilities, equipment, and manufacturing capability of the suppliers.

Business meeting

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