
A dairy company that had operated as a group of four different legal entities was acquired by our client. At the time of acquisition, the company was consolidated into one entity and a new management team was put in place to run the company. EBITDA subsequently declined from approximately $30 million to zero. We were retained to look at the company and provide actionable intelligence that revealed the specific causes of the decline that took place immediately following the acquisition.
We worked closely with the client to conduct interviews with members of the client’s acquisition team and employees of the acquired company. We also went on-the-ground to visit the factory and warehouses, to see the marketplace accompanied by members of the sales team and to meet suppliers. Additionally, we analyzed the financials and the client’s market research to build a complete picture of the company and the issues facing it.
In addition to identifying key elements that were not considered during our client’s due diligence, our team discovered that a certain preservative had been eliminated from the formula to make the product more natural. However, this change altered the flavor of its top selling product and caused customers to turn to the competition. Shortly after our research, the product was altered, arresting the decline, and the figures started to show a vast turnaround. Not only were our insights applied to help recover from the loss, but they were also used as a basis for best practices and to prevent the possibility of a similar occurrence in the future.