Operational Due Diligence (ODD)

ODD Benefits

• Understand business drivers and profitability challenges of the target sector

• Establish whether the business’s current operational platform and performance are sustainable, identifying risk areas

• Assess whether current operations enable the target to deliver on presented business plans; determine sensitivities

• Review synergies and identify carve-out or integration risks and requirements

 

ODD Scope

• Activities performed in due diligence vary depending on access to management

• Pre-acquisition, the typical focus for ODD relates to potential upside and risk considerations to support purchase price

• Post-acquisition, the ODD can become focused on specific functions and directly support future action plans

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ODD Activities 

• Conduct site visits, management interviews and operational assessments

• Generate hypothesis, expanding on and refining prior analysis:

  • Model future state operational scenarios

  • Future organization design

  • Strategies for achieving benefits/mitigating risks

• Develop pro-forma operating model

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