Whitecap delivers Commercial Due Diligence (CDD) for buy-side transactions, usually on behalf of small to mid-cap Private Equity. The deals on which we advise cover both growth capital investments and buy-outs, involving targets in a wide range of sectors, and the with the equity investment usually in the £2m-£10m range, although we have also supported larger deals.

In these projects our role is to help the PE houses’ investment committee make as fully-informed as possible an assessment of the attractiveness of their proposed investment.

To do this we typically cover the following areas of investigation through a mixture of desktop research, and expert and customer interviews:

  • Market Assessment: Size of total addressable market, key structural characteristics, trends in buyer behaviour, number and characteristics of suppliers (potential competitors), key competitor analysis.
  • Revenue Growth: In-depth analysis of the target business’ revenue growth plan, looking at both specific areas of highest growth and commercial levers required in order to deliver them.
  • Customer Feedback: A number of reference interviews with current and prospective customers to understand buying channels and processes and also the quality of product / service provided by the target in the real world.

As with all Whitecap work, our CDD work is performed in a highly collaborative and transparent fashion. While our primary objective is to help the PE House make the best possible investment decision, we are frequently told both that the way we work with the management teams of the target business helps them improve the quality of their commercial plan, and also that the CDD report we produce is used as a strategic ‘bible’ guiding decisions long after the investment transaction has been completed.

In addition to the buy-side CDD, we are increasingly working on Vendor CDD assignments, where our assessment is performed directly for the target business, ahead of any investor engagement, in order to help speed the deal process in due course.

Sectors covered to date include: Digital Technology (including FinTech, InsureTech, Enterprise); Manufacturing & Engineering; D2C eCommerce; Healthcare; and Professional Services.