Profitable Company Needed Fast Advisory Help for Acquisition Due Diligence

How Platinum partnered with manufacturer to make ”go/no-go decision” under significant time constraint.


A successful manufacturer with worldwide industrial customers buying its specialized processing equipment was considering a potential acquisition that, on paper, looked like a strategic fit. The opportunity presented itself when it learned that a company in the same general industry had filed for bankruptcy and was going to be sold in three weeks in a Section 363 Sale (where there is already an opening and approved, but not final, bid). The target company was well established, international, enjoyed a good reputation, and derived significant revenue from change and wear parts. Importantly, there was no customer overlap and the target company’s products, while sharing technical over-lap, competed in a different segment.

Platinum was invited to bring its due-diligence and advisory experience to bear on an expedited timetable and to provide a big picture, neutral perspective to a purchase and pricing decision.


  • A “go/no-go” recommendation — with cash flow projections, breakeven analysis, and liquidation estimates — was needed quickly due to the impending sale of the target company.

  • The manufacturer wanted to avoid the “all-hands-on-deck” disruption that would be caused if it put its own management team on the case.


Two Platinum strategists analyzed financial information in the bankruptcy “data room.” They conducted a two-day site visit to verify the data, inspect facilities and manufacturing process, and interview management. Information reviewed: bankruptcy documents; historic financial statements and schedules; the company’s sales, customer history, and backlog; and accounting, manufacturing and technology systems. Key issues addressed based on available data: (1) target company worth; (2) successful bid price, plus amount of new investment that might be required to cover known matters and a cash flow deficiency forecast; (3) likelihood of significant negative surprises; (4) liquidation cushion; and, (5) capability of current management and staff to lead the required changes.


Within this time frame, Platinum’s review of the situation and report included key financials to address the above issues. In a meeting with the manufacturer’s president, who had separately spent one day on a site visit, Platinum made the case for a “no go” decision. It concluded that the manufacturer would have to commit double a prospective bid price to cover the target company’s deficiencies and would unlikely see the operating margins it enjoyed in its own business. The president agreed. For a modest fee, Platinum’s experience was accessed to help with an important management decision with no interruption to its own operations.



Subscribe to newsletters, announcements and updates from the Platinum Group.