Customer Calls Provide Valuable Feedback

TypeSpecialized Due Diligence
Quick Facts$25 million manufacturer (“LinerCo”) and leading supplier of intermediate bulk moisture barrier liners in the United States. The Company offers a multitude of flexible packaging products servicing both dry and liquid applications. Majority-owned by a private equity group after the sale by the company’s (mostly absentee) founder.
ChallengesThe private equity group was working with a leading “Big Four” accounting firm for traditional financial due diligence related to the acquisition of this company. However, due to LinerCo’s strong market position and high gross margins, the buyout group wanted greater depth in the review of the industry, customer and competitive aspects of the business.
ApproachBecause of McHugh & Company’s experience with transactions, strategy, manufacturing and customer surveys, we were asked to conduct the detailed customer review (calls and site visits) and industry analysis.
ResolutionThis analysis:
  • ratified the strong relationship LinerCo had with its customer base
  • uncovered an emerging competitive threat from a small foreign company
  • backed up management’s claims about the high quality of its products; customers reported only minor quality incidents
  • documented pricing concerns from some large corporate accounts; industry consolidation was occurring and purchasing groups were looking for pricing concessions from key suppliers

Links to the other specialized due diligence cases:
  1. Does Acquisition of Unprofitable Competitor Make Sense?
  2. Tired Company in a Mature Industry

To view a list of all McHugh & Company Case Studies, click here.