Selected Engagement and Investment Experience
Oryx Horn’s leadership has extensive commercial and financial due diligence experience.
Commercial Due Diligence for a Mechanical Locks Manufacturer
Problem
- Assess the attractiveness and positioning of the target by a competitor in the market desiring to widen its product portfolio
- Understand the level of overlap between the target and acquirer’s products
- Understand the value chain and main distribution channels of the target’s main offerings
Action
- Interviewed 20 market experts (competitors, heads of sales in the market, large buyers of mechanical locks for their perception of the target)
- Mapped the value chain of the target’s main products from manufacturers, channels to end customers
- Mapped the main offerings in the mechanical lock market by competitor and pricing tier to understand the overlap of products
Result
Client validated the attractiveness of the target resulting in acquisition
Acquisition of a European Bathroomware asset
Problem
- Cranemere International had acquired a platform in the highly engineered shower tray market market a few years prior.
- In order to obtain a leading position in the fragmented market, Cranemere looked to roll up 2-3 additional assets to build a market-leading position in the market.
- We identified an asset to acquire and prepared a financial due diligence process.
Action
- Built the acquisition model with a complex operating model build:
- Creating 10+ operating cases to model differences in growth, margin and inventory build-up across 3 major countries
- The operating model fed the three statement model and an LBO analysis – the expected return supported completing the transaction IRR in the base case
Result
Cranemere went ahead and acquired this add-on asset ($10-100mm enterprise value range) and acquired a stronger leadership position in the European bathroomware market
Financial Evaluation of a Target in the Engineering and Architectural Design Market
Problem
- Evaluate the attractiveness of a top 100 engineering and architectural design firm for investment
Action
- Researched the market outside in (voice of customer, industry fragmentation, average profitability, drivers of competitiveness) through desktop research and expert interviews
- Evaluated the financials (revenue and growth, margin profile, capex intensity, market share) and a set of strategic questions, through expert interviews with former employees and competitors.
- Evaluated the impact of rapidly improving software on daily workflows
- Assessed the effectiveness of recruiting and retaining prolific engineers
- Pressure-tested industry performance through market cycles and the threat
Result
Gained comfort with the attractiveness of the sector and the asset but did not proceed with the transaction
Commercial Due Diligence in Media And Entertainment for a Private Equity fund
Problem
Three questions
- Obtain a holistic perspective on the market size and growth rate of the commercial payroll and short-term production payroll market
- Given the market growth rate in 1, obtain a realistic forecast growth rate for the target given its competitive positioning
- Obtain qualitative feedback on the historical performance of the company as well as its positioning for future growth and market share gains
Action
Built a market model forecasting
i) The size of the commercial payroll and short term production payroll markets
ii) The anticipated growth of the business based on a bottom up estimate of the- nterviewed ~20 market experts on the company’s growth prospects, strategic attractiveness of the company, potential for continued market share gain, recession resilience, and the company’s potential to maintain its leading market position over a five year hold period (and beyond)
Result
- Our work confirmed the hypotheses:
- The target offered a complex and mission-critical service that accounted for a small percentage of the overall budgets of production houses, which drove repeat business with its customers and limited incentive/desire to switch.
- Client leveraged our findings in multiple investment committee meetings and lender presentations resulting in an acquisition of the target
Commercial and Operational Due Diligence on an Air Medical Transport Operator
Problem
Commercial diligence on an asset in the air medical transportation market serving individuals in remote areas requiring hub to hub transportation between remote geographies like Alaska and large hospitals in the mainland
The team requested
- Perspective on overall market growth
- Perspective on regional market growth with sensitivity to take into account the recent commercial and government reimbursement pressure on the business
- Bottom up market model build to estimate market size and market size evolution over time
Action
Ran ~30 interviews to understand
- core set of activities performed by the key market players in the target geography
- the market map of the key market participants by geography (it is a regional market)
- the voice of the customer perspective and the competitive positioning of the target in its geography and drivers of its competitive advantage.
- market and target-specific risk (primarily regulatory risk given the high reimbursement per visit, relatively low volume nature of the market)
Result
Shared a synthesis of the market and individual company research in a condensed packet for the client to review and include in its investment presentation.
Commercial Due Diligence of a Commercial and Military Aerospace & Defense Supplier
Problem
Our client was evaluating the acquisition of a commercial and defense aircraft component manufacturer.
The client requested
- a market sizing
- market share of the target by segment
- qualitative feedback on the quality of the components from market participants
- An operational walkthrough of the production site to gauge current and potential operating efficiency of the production plant.
Action
- Built the market model based on the install base and production forecast for each aircraft family, number of flights per year and product’s estimated decay rate
- Estimated the target’s market share leveraging its revenue figures
- Interviewed industry experts to understand the product’s decay rate and replacement cycle
- Led interviews to obtain perspective into market positioning, competitive position, recession-resiliency
Result
Our material was leveraged in multiple investment committee meetings by our clients and we joined a few lender calls to share our findings directly. The client acquired the target a few months later
