Situation: A leading building products distributor was looking to expand its product line and grow through acquisition of a regional distributor serving residential and commercial markets. The Client and the target both served the same geographic market with largely synergistic product lines. Major priorities for the diligence were to size and segment the current and future addressable market. A key objective was to determine if the target was likely to meet its financial projections based on projected market growth, and strengths and weaknesses relative to competition.
Approach: Principia conducted primary research with current and prospective customers, along with supplier and channel checks to assess market growth prospects as well as the target’s competitive position. Extensive data was developed to size the market to understand the underlying construction market drivers in the region and formulate a view on the target’s growth prospects. Over 100 interviews were conducted to determine reasons for purchasing from the target and its peers and identify possible ways for the target to gain share of wallet.
Outcome: Principia validated that the target should be able to meet its growth objectives and identified areas where the Client would be able to drive synergies and realize the expected value from the completed transaction. The purchase of the target closed shortly after diligence was completed.
Situation: A leading supplier of sheathing and engineered lumber including I-joists and LVL was interested in pursuing a strategy to shift its overall revenue mix and increase sales in commercial mid-rise type 3A construction.
Approach: Principia quantified the addressable market opportunity for the client’s current products to determine the share of market size before developing a customer-driven needs assessment with the A&D and developer community. Insights from the voice of the customer provided an understanding of the specification and selection process and how the client could earn the right to win its share of this spec-bid-sale business. A business strategy centered around a focused go-to-market approach with a restructured commercial and technical organization was developed to support improved market coverage and customer intimacy with target accounts at each stage of the decision-making process.
Outcome: The client implemented the new commercial market-facing strategy which has led to six points of increased share above organic growth from market recovery as well as an improved vitality index from sales of new products innovated through customer feedback.