Principia Consulting

M&A Advisory Services:
Acquiring a Foreign Plastics Molder, and Integration Strategies

Challenge:
A large North American manufacturer required a thorough business analysis before it proceeded with the acquisition of a leading European plastic injection molder of automotive components.

Principia performed an analysis to examine product portfolio assessment, potential manufacturing synergies, the impact on distribution channels, and an overall business pro forma for merging the two entities. Principia developed a comprehensive program to provide the Client with valuable insights, including how the new entity could expand into new areas that neither company had previously pursued.

Result:
The corporate investor was successful in acquiring the target company. In addition, Principia successfully assisted the new entity in post-acquisition to integrate both businesses by eliminating cost redundancies and identifying new growth opportunities.

M&A Advisory Services:
Due Diligence for Acquisition of Synthetic Residential Exterior Trim Producer

Challenge:
A private equity investor group needed a detailed business analysis of an acquisition target’s synthetic exterior trim business.

Principia provided the client with an in-depth understanding of the market dynamics, and the adoption curve for residential exterior trim. The key question was: Would the target likely provide long term growth and value sufficient to justify a high-multiple purchase price?

Analyses included market size and growth projections, product and pricing features within the category, the competitive landscape including relative manufacturing economics, as well as market channel evaluation.

Result:
The Client received accurate insights into the target company to determine the best valuation and bid price for the property.

M&A Advisory Services:
Due Diligence for Acquiring a Mexican Hardware Manufacturer

Challenge:
A leading North American producer of builder's hardware sought to expand manufacturing operations and market presence in Mexico. The company had identified one potential acquisition candidate and required an objective review of the target's operations and position in the Mexican market.

Principia developed an in-depth program to provide due diligence on the Mexican hardware producer. We conducted a complete investigation of the target's market position and manufacturing resources to determine the proper fit and value that the acquisition could provide.

Result:
The Client gained a significant understanding about the target acquisition as well as additional validation about market conditions for the hardware industry in North America. The Client followed our recommendation, acquired the company and is enjoying the benefits of the new addition.

M&A Advisory Services:
Due Diligence of Automotive Air Bag Components Producer

Challenge:
A North American producer of automotive air bag components needed to establish European production facilities to better serve a major auto producer's supply requirements.

Principia searched for potential acquisition candidates in Europe. The program included a complete benchmarking of best-in-class producers of airbag components and valuation of the best acquisition candidate.

The investigation included analysis of various scenarios to determine the likely fit of the European producer with the North American company across both commercial and manufacturing elements. Subsequent phases of the engagement included assessing the benefit of establishing a new facility in Europe instead of entering the market through acquisition.

Result:
The company gained significant understanding about the acquisition target as well as additional competitive validation about its own operations. Following our recommendation, the company decided to expand its own capacity internally in lieu of the acquisition in Europe.

M&A Advisory Services:
Due Diligence on Steel Tubing Fabricator

Challenge:
A private equity investor group identified a producer of steel tubular products as a potential acquisition. The group had been in discussions with the producer and thoroughly reviewed their operations and financials, but needed an objective review of the market opportunities and competitive positioning for the producer.

Principia developed a comprehensive due diligence program to provide the group with insights on market conditions, growth opportunities, customer requirements, the target's competitive position and resources, and ability for the investor group to create further growth and value from the acquisition.

Principia worked closely with both the investor group and the acquisition target, and thoroughly researched the external market to develop an independent valuation.

Result: The group used our recommendations as the foundation in its negotiations with the producer. The group did not complete the acquisition, as the requested purchase price exceeded our good-faith valuation of the company.

M&A Advisory Services:
Business Assessment of Electronic Chemicals Targets

Challenge:
A buyout firm had short-listed two potential specialty chemical companies in the electronic chemicals industry and required assistance in detailing each of the targets to determine which one provided the best path for growth and maximum value.

Principia completed a detailed review of each target to provide the Client with valuable insight on market conditions, product portfolio, customer requirements, and the targets’ overall competitive position in the industry.

Result:
The Client gained an understanding of this highly dynamic industry, and used our recommendations to successfully pursue one of the two target candidates.

M&A Advisory Services:
Helping a Plastics Compounder Grow Through Acquisition

Challenge:
A leading polymer compounder asked Principia to help determine the impact of market share on the profit potential in a specific business. Individual program components included market analysis, customer segmentation, manufacturing cost assessment, and financial analysis of over 15 key competitors.

This series of programs determined that attaining a market share equal to twice the second largest compounder would result in significant leverage and increased profits. Principia further assisted the company in evaluating prospective acquisition targets, and developing valuations for the attractive businesses.

Result:
As a result of this work, the company acquired a large competitor for roughly $100 million, and consolidated market share while increasing overall profitability. We continue to work with this company to identify other suitable acquisition candidates.

M&A Advisory Services:
Entering the Dock and Seawall Business through Acquisition

Challenge:
A leading aluminum company wanted to integrate downstream into value-added segments of the fabricated aluminum market. The company identified the dock and seawall market as an attractive area, and needed help identifying acquisition candidates that represented a good strategic fit.

Principia first provided an overall market assessment to confirm their interest in the market. Principia then identified more than 250 companies active in the business, and screened the candidates to reach the 50 most attractive targets. Principia provided a comprehensive evaluation of these candidates, of whom several were selected for their ability to collectively form an entity with national coverage and a complete product line.

Result:
The company made its first acquisition, and is following an aggressive plan to roll up other acquisitions as part of its national commercialization strategy. Annual sales are targeted at $250 million within three years.