Skip to main content

Expert Network for Due Diligence: The Conviction to Walk Away

Developing the Conviction to Walk Away from a Deal

In the fast-paced world of private equity, timing is everything. When a potential deal lands on your desk, you need answers quickly. But speed shouldn’t come at the expense of thorough due diligence. For Rosewood Private Investments, the clock was ticking. They were intrigued by a manufacturing / distribution business in the HVAC space, drawn to its impressive margins and vertical integration. However, the information provided by the investment banker was lacking, leaving them with critical unanswered questions about the true value proposition and product quality. They needed clarity, and they needed it fast – within three business days, to be precise.

Specifically, they needed an expert network to dig deep into:

  • The Big Picture: Determining if this business represented a compelling investment opportunity, given the available information.
  • The “Why”: Uncovering the true value proposition of the manufacturing operation and understanding the drivers behind its impressive margins.
  • Product Power: Assessing the caliber and competitiveness of the products distributed by the company’s distribution arm.

The Apex Approach: Informed Decisions in Days, Not Weeks

Rosewood Private Investments needed to quickly assess the potential of this HVAC manufacturing / distribution business, and the banker’s materials weren’t providing the full picture. We connected the client with high-caliber HVAC executives including:

  • A veteran of the HVAC industry with nearly 40 years of experience including VP role at Johnstone Supply Corporate  
  • A seasoned executive with 30 years of experience, including several President-level roles and a CEO position at Johnstone Supply Ventura Group

The Expertise Delivered

The engagement with Apex Leaders provided Rosewood Private Investments with precisely the insights they needed to make a confident decision. The HVAC executives delivered a rapid and comprehensive assessment of the opportunity, addressing each of the client’s key concerns.

  • Product Portfolio: The advisors provided a clear understanding of the specific HVAC products manufactured and distributed by the target company. Their analysis revealed the competitive landscape, identifying which products were truly innovative and differentiated, and which were more commoditized offerings. This detailed product portfolio analysis gave the client a crucial understanding of the company’s market position.
  • End Markets: The experts identified the target customer base, clarifying the balance between residential, commercial, and industrial end markets. They also provided valuable insights into the size and growth potential of each market segment, giving the client a clearer picture of future revenue opportunities.
  • Value Chain Positioning: The advisors’ analysis illuminated the company’s precise place within the complex HVAC value chain. They identified the company’s core competencies and any competitive advantages in manufacturing, distribution, or both. This analysis revealed potential synergies and vulnerabilities within the business model.
  • Investment Potential: Crucially, the HVAC executives provided a thorough assessment of the investment opportunity. Based on their deep industry knowledge and analysis of the confidential information, they outlined the key risks and potential rewards associated with the deal. This assessment empowered the client to make a well-informed decision.
Smiling woman using a tablet for private equity due diligence in the HVAC sector

The Results: Walking Away with Confidence: The Power of Expert Due Diligence

In the world of investments, knowing when to walk away is just as crucial as knowing where to invest. Effective private equity due diligence is paramount in making these critical decisions. In this case, Rosewood Private Investments leveraged expert due diligence to walk away from the deal and avoid a potentially risky situation, saving time and resources. Here’s how:

  • Rapid Candidate Placement: Expert advisors were identified, vetted, and presented to the client within two hours of project kickoff.
  • Enhanced Due Diligence: Client consultations with advisors provided key insights, enabling them to ask targeted questions of the banker.
  • Decisive Action: Top-rated advisor insights empowered the client to confidently walk away from a potentially risky deal, despite its initial appeal.
  • Clear Market View: Advisors provided a comprehensive understanding of the target company, its market position, and key disruptors.
  • Time & Cost Savings: Within one week, the client gained the conviction to avoid a lengthy and costly due diligence process.

Strategic Partnerships, Decisive Due Diligence Outcome

In the fast-paced world of private equity, access to the right expertise at the right time is paramount. This engagement demonstrates the value of Apex Leaders’ targeted approach. By connecting clients with highly specialized advisors, we empower them to make confident investment decisions, even under tight deadlines. When time is money, and clarity is critical, Apex Leaders delivers.

Ready to gain a competitive edge in your next investment? Let’s chat.

Contact Us