Assessing Growth Potential: Leveraging HR Due Diligence for Informed Acquisitions

Background

Our client, a private equity firm with extensive experience in the lower middle market, specializes in partnering with founder-owned businesses and management teams to foster dynamic growth. With a focus on transformational opportunities in the Services and Consumer sectors, they seek out companies generating $5-$25 million of EBITDA, particularly those undergoing inflection points for accelerated growth. Their latest evaluation revolves around a US-based business and technology advisory consulting firm, catering to the Financial Services, Utilities, Healthcare, and Public Sector/Tax industries.

Problem Statement

To make an informed decision regarding the acquisition, our client needed a comprehensive assessment of the target company's capabilities, scalability, and risks. Specifically, they sought assistance in evaluating the target's fulfilment, delivery, and technical capacities, as well as assessing their performance metrics across multiple locations. The client aimed to identify the potential for growth and ascertain whether the acquisition aligned with their investment strategy.

Solution

Recognizing the importance of a well-rounded evaluation, the private equity firm enlisted the expertise of Navikenz, a leading provider of due diligence services. Navikenz conducted an in-depth HR due diligence process, focusing on critical aspects that impact business operations and growth potential.

Navikenz's due diligence report offered an objective analysis of the target company's fulfillment, delivery, and technical capabilities. The report delved into compensation and retention metrics, efficiency, and maturity of delivery operations, and assessed the competence of key technical personnel. By thoroughly examining these areas, Navikenz provided valuable insights to the client, enabling them to gain a deeper understanding of the target company's strengths, weaknesses, and growth prospects.

The comprehensive HR due diligence report acted as a guiding compass, shedding light on critical factors such as the target company's cultural fit, performance metrics, scalability, and risks across multiple locations. Armed with this information, our client was empowered to make an informed decision regarding the acquisition.

Conclusion

Navikenz's comprehensive HR Due diligence toolkit played a pivotal role in supporting our client's evaluation process. By examining the target company's fulfillment, delivery, and technical capabilities, as well as other key aspects, the toolkit provided valuable insights into the potential for growth and scalability. Armed with a comprehensive understanding of the target's strengths and weaknesses, our client was able to make a well-informed decision regarding the acquisition. The company demonstrated its commitment to maximizing growth opportunities in the lower middle market through its partnership with Navikenz.