The acquisition we helped them renegotiate
We ran due diligence on a $180M deal and saved the client $40M.
Client
Timeline
3 months
Services
Strategy & Growth
The situation
Kestrel Capital was deep in due diligence on a healthcare business they'd been tracking for two years. The numbers looked right, the market was attractive, and the vendor had a compelling story. But something felt off. With 30 days to close they called us for a second opinion on the commercial side of the deal.
The problem
The financial due diligence had been thorough. The legal work was solid. But nobody had stress-tested the commercial assumptions — the customer relationships, the competitive dynamics, the market projections that underpinned the entire valuation. In a $180M deal those assumptions were worth looking at carefully.
What we did
We ran a three-week commercial due diligence sprint. We talked to 22 customers, mapped the competitive landscape, and stress-tested the revenue projections against market data. What we found was significant: three risks that weren't visible in the data room and hadn't surfaced in the financial due diligence.
First, two of the company's largest customers — representing 35% of revenue — were in active conversations with a competitor. Second, the market growth assumptions in the model were based on pre-pandemic data that no longer reflected reality. Third, the pricing power the vendor was claiming depended on a regulatory environment that was about to change.
The results
$180M
Acquisition renegotiated
3
Critical risks identified
22
Customer interviews completed
