Electrical/ Electronic Products
Customer & Market Due Diligence Of Electrical Products Manufacturer: Establishing Brand Importance And Recession Risk
Conducted a 2-phase, 5-week customer & market due diligence to establish: (1) the target’s cyclical exposure/recession risk; (2) the target’s competitive positioning/reputation; (3) manufacturers’ rep dynamics; (4) pricing dynamics/trends in the target’s product categories; and (5) e-commerce trends in electrical products market. To this end, Gotham: conducted interviews and surveys with electrical contractors, distributers, and manufacturers’ reps; built an MSA-level electrical product market sizing model; conducted recession risk analysis; and built an electrical product map. Our fact-based brand importance and recession risk assessment allowed our client to successfully close the deal and develop a suitable capital structure to withstand a recession. The business performed within quantified parameters during the COVID-driven demand shock.
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Exit Preparation/Positioning for Electronics Component Supplier: Establishing Niche Market Positioning and Multi-pronged Growth Strategy
Built a solid fact-base of company sales, market position, and competitive dynamics by analyzing 7 years of customer sales/customer data, conducting 170 interviews and 1,900 online surveys of customers/prospects, and building a bottom-up market sizing model. Established company’s position as a niche leader using an original use-based segmentation based on customers’ component needs across the product life cycle. Developed a multi-pronged growth strategy to achieve 14% CAGR growth (vs. 6% overall market growth) by leveraging company’s end-market presence and In Operations segment strength. Gotham also analyzed the impact of pricing on volume and established end-market mix, not pricing, was the driver of recent decreasing flagship catalog brand sales volume. Gotham’s work allowed management to position the company as a niche leader and to begin implementing a credible growth strategy to prepare for a successful eventual exit.
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Creating a Fact-based, Realistic Operations Strategy at Leading Industrial Machinery Manufacturer: Performance Enhancement at IndusTech
Conducted a 2-week diagnostic of current performance as a first step in helping craft and execute an operations strategy. Specific elements of the proposed strategy included: (1) outsourcing non-core activities; (2) rationalizing the vendor based and developing focused supplier partnerships; (3) segmenting operations (equipment vs. consumables) to improve supply chain management; and (4) Moving towards standard and modular system design to greatly simplify inventory and production. Short-term cost savings of $2MM successfully captures and $3+MM longer-term savings capture on track.
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Customer & Market Due Diligence of Test & Measurement Equipment Distributor: Assessing Channel Risks and Validating Growth Potential in Niche Specialty Distribution Market
Conducted OEM, Customer & Market Due Diligence to confirm continued industry shift to indirect channel, establish target’s competitive positioning, analyze rental business attractiveness, and explore adjacent market expansion opportunities. Created market sizing model to validate market size and growth prospects, conducted 50+ customer and OEM interviews, modeled financial impact of indirect channel on OEMs, and performed extensive research. Gotham’s 2-phasse due diligence effort enabled our client to win the auction and successfully complete the acquisition of target.
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Proactive Investment Strategy For MIddle-Market Private Equity Fund: Identifying Target Specialized Manufacturing Industries For Investment
Supported fund raising effort of a middle-market PE firm by validating the firm’s ingoing hypothesis that the investment boom in emerging economies would drive growth for specialized manufactured products, with the next 24 months presenting a significant opportunity to invest in its 4-5 related platform companies. Gotham: reviewed preferred profile of target acquisitions with the investment committee; established investment trends in 25 key sectors; identified and short-listed industries benefitting from these investments; and identified key products and companies within short-listed industries. Our client successfully closed its new fund within a few months, exceeding its original target.
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Operations Improvements at International Custom Machine tools Designer and Manufacturer: Quick-win Engineering and Material Cost Reductions
Conducted 4-week diagnostic to understand drivers of ongoing margin erosion (~10% point gap between quoted margin vs. realized margin) that identified $1.7-2.7MM in quick-win cost savings opportunities in 3 key areas: robust, cross-functional quoting and engineering processes with formal involvement of engineering in the quoting process and proactive management of hours/scope in the engineering process; material spend reduction by implementing cost-focused (vs. “get the parts in”) purchasing process/tools, renegotiating/ establishing contracts with key vendors, and standardizing parts to leverage volume; and selective migration of engineering to India, starting with detailed engineering and phasing in higher skill activities. Execution assistance included: creating vendor negotiation strategy and vendor packages for top vendors (6-20% savings already realized); crafting quoting and engineering process end-vision; and developing a detailed capture plan with timeline for all targeted savings.
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