Unlocking Investment Success Through Strategic Partnerships

Establishing strong and enduring partnerships with seasoned industry experts is essential for the success of platform investments, both during diligence and post-close. This strategy was implemented when one of our clients approached us with the goal of entering the market of end-of-life (EOL) and obsolete component distribution.

Empowering Investment Decisions with EOL Component Distribution Expertise

To enable our client to quickly gain the clarity and insights needed to make a confident investment decision, we initiated a comprehensive intake call to understand the target company, pertinent angles to explore, and the necessary expertise required.

When component manufacturers issue a notice of discontinuation of a component, issues arise for both the manufacturer and the customer. The customer needs to find a path for future procurement or face an expensive product redesign. The manufacturer is forced to either liquidate inventory at a highly discounted rate or scrap finished inventory and raw goods, taking a total loss.

The target company specializes in distributing components that have been deemed end-of-life (EOL) or obsolete by the original component manufacturer (OCM) to various end markets, such as aerospace and defense, healthcare, industrial, and telecom. What sets them apart is their authorized status with their OCMs, which distinguishes them from independent distributors sourcing from the open market, which can be contaminated by counterfeits and secondary sourcing. According to the bankers and the company, there are no direct competitors who focus on this EOL niche within the distribution space.

Industry Experts to Validate Competitive Advantage of Niche End-of-Life Component Distributor

To confirm these claims and better understand the dynamics of this niche market, our client needed to consult with OCM executives. Our client was looking for a long-term advisor who could review CIM materials, attend management meetings, and potentially take a post-close role, so they needed to be removed from the space without any conflicts of interest.

Our client was on a tight deadline and needed calls to be set up within three business days. Our team confidently accepted the challenge, and within five hours, we presented our client with four potential long-term advisors.

• Former CIO and VP of Global Components | Arrow Electronics
• Former CEO | Stock-Point Electronics Inc
• Former President of Global Business Units, Chief Logistics Officer, and COO | Avnet
• Former Chief Strategy, Innovation, and M&A Officer, SVP Global HR Solutions | Avnet

Through discussions with each of the four former executives, our client discovered that their target company operates in a duopoly with another much larger and established firm. To gain a better understanding of the target company’s competition, our client expressed interest in speaking with individuals from the competitor to learn about their value proposition, differentiation, and how they view the target company.

It was a challenging task, but our team delivered and was able to connect our client with:

• Former Sales Manager, Americas | Competitor
• Former Production Control Planner | Competitor
• Former Regional Sales Manager | Competitor