Strategy Development Evolves into Sell-Side Advisory

Deep insight from our thorough assessment led to the development of a robust and highly successful sell-side strategy.

ChemQuest was initially hired to review a diverse company portfolio that included a unique high-margin niche additive technology platform in the home and laundry care market, as well as unrelated niche formulated product offerings. 

Upon a deep dive into growth opportunities, ChemQuest advised that the divestment of the additive platform would yield an extremely high profit for the parent company if the right buyer was identified and an appropriate deal structure was established. ChemQuest was then tasked with identifying and vetting buyers interested in acquiring a technology platform, with the potential to bring the high-margin, established business to a new owner.

This project entailed three main activity areas: discovery, forecast model, and divestment.

Discovery Process
Our team conducted a thorough discovery process to understand the current business’ core competencies:

• Assessment of IP and polymer science capabilities as related to expansion opportunities
• Examination of adjacencies to drive higher returns for business units
• Identification and ranking of attractiveness for all opportunities across the portfolio
• Development of strategies, including options, sensitivities, key risks, and M&A thesis

Future Forecast Model
We then built a future forecast model based on the bottoms-up business.

Divestment
The completed strategy work, including the discovery process and future forecast model, led to the decision by the client’s Board of Directors to explore divestment opportunities. Our team then:

• Used the strategy work to create the basis for the growth opportunities presented in the CIM
• Enhanced the investment bank’s list of identified buyers with strategic buyers based on our deep industry knowledge and relationships
• Developed buyer profiles with our consultants’ extensive industry connections, technology expertise, and specialty chemicals business acumen
• Used a customized Pugh Matrix methodology to rank and prioritize the buyer candidates for best fit to the seller’s profile and needs, including an all-cash deal

Through a thorough study of the client’s unique technology platform, ChemQuest identified organic and inorganic opportunities for the parent company. Our assessment revealed the greatest financial opportunity for the parent was to sell the business unit. 

ChemQuest’s deep roots and relationships in the industry enabled the identification of an ideal strategic buyer and created a win-win result for both parties. The business sale was successfully consummated — exceeding a 20X EBITDA multiple — with seller and buyer goals achieved.