7 mergerMultichannel Due Diligence Services

F. Curtis Barry & Company assists potential investors in assessing investment opportunities by providing multichannel consulting on business acquisitions. Our perspective is one of operational consultants for multichannel businesses – companies that operate some combination of direct-to-customer sales (catalog and e-commerce), retail (brick-and-mortar), and/or wholesale channels. We evaluate the investment potential and necessary costs to make improvements and identify any inherent risks. We provide analysis related to pre-acquisition activity as well as to the post-acquisition improvement processes.

Our multichannel (retail, eCommerce, catalog) acquisition due diligence services focus on the due diligence process relating to a company's operations, which include all of the activities associated with merchandising, marketing, information technology, warehouse operations, and call center operations. The evaluation of a business's potential and the costs to make improvements and reduce costs, along with the identification any inherent risks, should form the basis of the operational due diligence process.

Pre-acquisition Services

Before acquiring a business, it is imperative that you assess all aspects of that company in order to make a wise decision. As part of pre-acquisition due diligence, we evaluate the following specific aspects of operations:

  • Cost per order as a benchmark to determine true productivity (including factors such as wage rates and productivity levels)
  • Utilization and true operating capacity of the physical facilities
  • Inbound receipts to retail locations
  • The ability of the company to meet future growth demands
  • Sales floor POS store processing
  • Customer service levels, with actual performance compared to industry standards
  • Available infrastructure system support as an indicator of the ability of the business to support current needs and future, as-yet-unknown changes
  • Retail merchandising systems including seasonal planning, forecasting, inventory control, price changes, stock ledger, etc.
  • Basic inventory measures such as turns and ageing as well as a review of the top 10% and bottom 10% of SKU sales to measure the effectiveness of the forecasting process
  • Staff interviews to gauge the work culture, which is unlikely to be easily changed unless the business will be closed or moved

Post-acquisition Services

Once an investment has been made, it is important to develop plans for action that can be readily implemented and a process similar to the Pre-acquisition assessment should be followed. From this thorough and methodical evaluation of all of the operating areas within the business a list of potential improvements is derived. This list includes costs, savings, risks, timelines, and any other related factors that can be used to prioritize potential changes focusing on the goals of reducing costs and improving service levels. The process used to “discover and fix it” can be built on work done during the Pre-acquisition due diligence or be an independent step in the process.

Implementation Plan

A final step in the process is to develop a detailed transition or implementation plan. This plan will detail the steps required, the persons accountable for completion of each step, and a related timeline.

For a more detailed perspective on catalog consulting, business acquisitions and our due diligence services, please read our venture capital due diligence article.

Below is an example of the type of work we have completed:

Case Study

F. Curtis Barry & Company assisted an investment company with multichannel acquisition due diligence for the purchase of a small home business with one store. The client implemented our recommendations for merchandise circulation planning, fulfillment, and call center processes and systems, which successfully grew the client into a national chain of over 30 stores with e-commerce and catalog profitability.

To discuss how our multichannel acquisition due diligence services can help you, please contact us at (804) 740-8743, e-mail him at info@fcbco.com, or fill out our Request Information Form.

Merger and Acquisition Services Articles

Consulting Services for Private Equity or Venture Capital Acquisitions and Investments
F. Curtis Barry & Company provides due diligence services to potential investors in the multichannel retail arena to investigate the feasibility of, or provide support for, mergers, acquisitions, and/or investment opportunities. Our perspective is one of operational consultants for multichannel retail businesses—companies that operate some combination of direct-to-customer sales (catalog and e-commerce), retail (brick-and-mortar), and/or wholesale channels. Read more...

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