What Others Are Doing: Due Diligence - Acquisition

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Assignment:
A company in the family entertainment industry was interested in acquiring a complementary company. The potential acquisition target had an innovative new product, but in a market that had been flat / declining. In addition, emerging technologies had the potential to negatively impact/obsolete this new product. To assist in the decision-making process, senior management and the board of directors of the acquiring company needed a fast, but thorough assessment of the market potential for the target company.

Results:
DHC conducted an extensive review of information on industry trends and emerging technologies. As a part of our research, we reviewed dozens of market research studies before purchasing an appropriate, targeted current research analysis of the relevant industry. This research study, coupled with extensive secondary research, enabled DHC to develop a detailed 10 year market projection, a definitive point of view on the impact of emerging technologies and projected volume and market shares for the target product. The board of directors had originally feared that the emerging technology might obsolete the new product in a relatively short period of time. DHC’s analysis helped the board have a clearer understanding of the near term (next 5 years), mid term (5-10 years) and longer term (beyond 10 years) impact of emerging technologies and market trends. This information enabled the board to make a factbased decision on whether to acquire the target company.