M&A (Mergers & Acquisitions) Commercial Due Diligence (CDD) Models, Templates and Frameworks Bundle

Description
Buy-Side Commercial Due Diligence (CDD) is an activity instigated by a potential buyer (Corporate or Private Equity PE) to analyse and reveal a target's company business model, commercial potential and synergies, during an M&A (Mergers and Acquisitions) operation. It is generally led and conducted by a Strategy Consulting Firm (e.g. BCG, McKinsey, Bain, Strategy& etc.). The output is generally a 50 to 200 slide long document, enabling the potential buyer to assess the standalone and/or combined evolution of the target company in the next 5 to 10 years.

The CDD is generally conducted prior to the actual deal but after the short-listing of potential acquisition targets (almost always already reduced to 1 preferred candidate).

It is generally combined with Legal Due Diligences (LDD) and Financial Due Diligence (FDD), carried out by different firms, or the same if a big 4 (e.g. PwC, Deloitte, EY, KPMG).

It gives insights on many sides of the target business such as: market dynamics, competition, revenue, market positioning, demand etc.

A commercial Due Dilligence is usually composed of three phases:

1. Liaising Process
2. Preparation of a Genuine Report
3. Review of the Due Diligence Report

In the report the "classic" aspects covered are generally:

• Company's General Information
• Summary of Key Findings
• Management and Employees of the Company
• Legal Matters
• Products and Services
• Production, Purchasing and Suppliers
• Marketing
• Competition
• Market Environment
• Strategy
  
  

The classic activities conducted are (generally categorised in Industry/Market, Customers, Competitors, Growth Projections):

• Market Sizing (TAM, SAM and SOM)
• Competitive Landscape Analysis
• Business Plan Review
• Analysis of the Customers (Customer Feedback, Ideal Customer Profiles, Net Promoter Scores...)
• Sales and Marketing Metrics, Dynamics and Processes
• Assessing the quality of the business goals
• Investigating pricing and margins
• Market Trends, Future and Analysis
• Optimisation of Internal Operations
• Identification of Adjacent Opportunities

Why are Commercial Due Diligences (CDDs) generally conducted?

1. To negotiate the deal price with as much information as possible
2. To have a third party bring a form of assurance that the investment is worth it
3. To analyse the potential external effects affecting the target business
4. To grasp a better understanding of the competitive landscape

More on Commercial Due Diligence by DealRoom here or by BCG.

Having worked on several Commercial Due Diligences myself both on the sell-side (at adVentures) and buy-side (at Strategy& ), I have combined here a list of models, frameworks and templates for Strategy Consultants, which can be specifically pertinent in a CDD. More will be added progressively.

The current list of models, frameworks and templates focuses on:

• Target Screening (pre-CDD) - perfect to introduce the deck
• Market Analysis
• Market Positioning / Competitor Analysis
• Market Mapping / Industry Landscape
• Pricing Analysis
• Strategic Planning / Business Modelling
• Marketing /Customer Analysis
• Risk Analysis

🎯 TARGET SCREENING:

✅ McKinsey's Strategic Control Map
✅ M&A Buy-Side Target Screening Nine-Box Matrix
✅ M&A Sell-Side Target Screening Nine-Box Matrix
✅ Due Diligence Targets Shortlist

🏛 MARKET ANALYSIS:

✅ Porter's Five Forces
✅ PEST & PESTLE Analysis
✅ Accenture Disruptability Index Matrix Template

🏆 MARKET POSITIONING / COMPETITOR ANALYSIS:

✅ Market Positioning VS Competition
✅ BCG (Boston Consulting Group) Growth-Share Matrix
✅ Competition Feature Comparison
✅ Market Mapping/ Industry Landscape Template

🤑 PRICING ANALYSIS:

✅ Pricing Positioning - Industry Competitor Analysis
✅ Kotler's Quality vs Price
✅ Bowman's Strategy Clock

📈 STRATEGIC PLANNING / BUSINESS MODELLING:

✅ McKinsey’s Portfolio of Initiatives
✅ Ansoff Matrix Framework - Product/Market Expansion Grid
✅ Business Model Canvas
✅ McKinsey's Strategic Three Horizons Model
✅ SWOT Analysis/Matrix
✅ Porter's Generic Strategies Matrix
✅ ADL (Arthur D Little) Strategic Condition Matrix Framework
✅ McKinsey's Growth Pyramid Model and Matrix
✅ M&A Acquisition Synergies Template

😊 MARKETING/CUSTOMER:

✅ Competitor Analysis - Net Promoter Score (NPS)
✅ Simon Sinek's "Start with Why" Golden Circle Template

😱 RISK ANALYSIS:

✅ Strategy & Risk Management Framework - EIP (Easter Island Pentagon)
✅ Risk Analysis Matrix

Should you have any questions on using these top tier Buy-Side Commercial Due Diligence Frameworks, Templates and Models, you're welcome to reach out to me via Private Message (also if you have ideas for new slides to include!)

Good luck!
- Tim