Case Study
Executing A Standalone Costing Model
The Situation
A sponsor was evaluating a carve-out add on acquisition of a $270 million specialty distributor of rough-in and fashion plumbing products from a global publicly traded company. Accordion was engaged to develop and establish a standalone costing model for the sponsor to aid in the bid process with subsequent phases defined to further evaluate entanglements, TSA needs, and support the integration.
Services
Standalone Costing Model
TSA Advisory
Entanglement Assessment
The Execution
- Began the engagement with an already in progress diligence effort.
- Discussed current allocation and financial baselines with the Financial Due Diligence provider to ensure alignment on respective scopes after reviewing the data room, Confidential Information Memorandum (CIM), and other available information.
- Conducted a series of management calls to further identify services (allocated and not-allocated) provided by the parent corporation – the scope of which covered HR, Finance & Accounting, Sales, Marketing, Supply Chain, Legal, and sub-functional areas.
- Documented the services provided and the identified entanglements during the management calls.
- Developed estimates to replace services provided by the parent utilizing databases and third-party services providers.
- Saved any documented entanglements to be used in subsequent phases to inform TSA schedules and carve-out and integration planning.
The Results
Our Accordion team delivered a standalone financial model of functional standalone run-rate costs and one-time carve-out costs for the business as well as entanglement findings and potential deal issues and risks. The stand-alone cost estimates were incorporated to the sponsor deal model to better estimate run-rate EBITDA.