M&A Plastics Advisor

Problem

In order to make successful mergers and acquisitions, it is essential to conduct due diligence. That includes looking closely at the financials as well as a careful assessment of the technology. For example, does the target company have a true competitive edge? Is that edge protected as a trade secret or by a strong patent portfolio? What does the IP space look like? Most scientists do not have the commercial sense or experience to answer these questions, so when clients need advice, they seek Phantom as a proven M&A plastics advisor.

Action

In this particular instance, a private investment firm with several billion dollars worth of asset under management came to Phantom for advice. They were considering two acquisitions and needed accurate, rapid feedback on the attractiveness of each potential deal. They provided two very substantial slide decks, one for each potential target, with all of the pertinent financial data and specifics of the businesses.

Business Profits Meter

Solution

In each case I was able to read and evaluate all of the material within one business day, whereupon my initial impressions were delivered to the client. Further investigations into the market segment and trends together intellectual property factors gave a more accurate picture of not only the current conditions but also the likely future prospects of each company. The recommendations for each company were polar opposites.

The first company was doing well financially but they had no technological edge or differentiators compared to their competitors. Even worse, their home markets where their factories are located were shrinking. The only growing markets were overseas where logistics made them uncompetitive. My recommendation was to pass on the opportunity and the client did so.

In contrast, the second company had unique products and a clear competitive advantage which could be projected to last for many years due to a strong IP position and a business model based on long-term contracts. Withing one business day I had made an initial assessment and two days later made the final recommendation. The client proceeded and shortly thereafter issued a press release about the new acquisition which was valued in the hundreds of millions of dollars. A top M&A plastics advisor can make the difference between positive ROI and disaster.

Dr. DeArmitt has been giving valuable technical and strategic insights for decades, ever since his time at BASF’s HQ in Germany where he advised BASF Venture Capital.

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