Our private equity client was in the process of making a bolt-on acquisition to a portfolio company. They needed to understand the cyclicality of the US chemicals industry in general and potential substitution risks for the product portfolio of the acquisition target.
What we did
- Detailed analysis of the US chemicals industry over the last 15 years in terms of price, value and capital expenditure
- Detailed analysis of target penetration by chemical sub-sector, customer and plant in the Gulf Coast
- Extensive interviews with end-users to understand how the target's products were used within their applications and the risks of substitution
What we delivered
- An assessment of where exactly the US chemicals industry was in terms of its cycle and realistic health warnings about its future prospects
- An assessment of where the target made its money by geography, product and customer
- An assessment of the risks of substitution for its products
- Practical plans to mitigate risks and increase upside through product/service and gegraphic expansion