Management ConsultancyService
Commercial due diligence
Whether the business will still be performing in three years.
Kaelo Global is a Dubai company licensed in Meydan Free Zone, with over 100 clients served so far.
At a glance
What it is
Financial diligence asks whether the numbers are true. Commercial diligence asks whether they will stay true.
A principal, Kaelo Global management consultancy
Commercial due diligence asks a different question from financial due diligence. Financial diligence establishes whether the numbers are true. Commercial diligence asks whether they will stay true: whether customers are loyal or simply present, whether something protects the market position, and whether the growth in the plan has a real mechanism behind it.
Commercial due diligence looks at customers, the market and the operation. We examine customer concentration and the strength of key relationships, what protects the company's position, the mechanism behind its growth plan and whether the operation can deliver that plan. We set out our findings in writing, including what we could not establish and what would change our view.
We are most useful on businesses we understand from an operating point of view, such as logistics, trading, consumer goods and manufacturing companies in the Gulf and South Asia. Our view sits alongside the financial, tax and legal diligence carried out by your other advisers.
What's included
Six areas of scopeCustomer concentration and quality
Beyond the share held by the largest customers, we look at tenure, contract basis, switching costs and who owns each relationship. A concentrated customer base held on personal relationships that could leave with a founder is a very different asset from the same base on multi-year contracts.
Whether the position is protected
Market share is a result. The question is what protects it, such as switching costs, regulatory position, distribution or a genuine cost advantage. If nothing protects it, the margin may not last.
The growth mechanism
Growth assumptions need a mechanism behind them. Hiring more salespeople is a mechanism. A market growing at a published rate is an assumption that the business will keep its share as the market grows, which is exactly what needs testing.
Operational deliverability
Whether the operation can actually deliver the plan. This is where an operator's view differs most from a purely analytical one, and where plans most often fail after a deal.
Customer and market interviews
Discreet conversations with customers, former customers and people in the industry, to test what the company says about its reputation and position.
Logistics and supply chain review
For trading, distribution and manufacturing businesses, a close look at suppliers, logistics costs and supply risks that could affect the plan.
How the work runs
Scope
The questions that could change your decision.
Evidence
Customer, market and operational evidence, weighted by how much it matters to the decision.
A written view
Including what we could not establish and what would change our answer.
Discussion with your team
A session with your deal team to talk through the findings and answer questions before you decide.
When to come to us
- 01You are acquiring a business and financial due diligence is already under way.
- 02A growth plan needs testing before it receives funding.
- 03You want an operator's view alongside an analyst's.
- 04You are considering a partnership with, or an investment in, a business outside your home market.
What we do not do
- Financial or tax due diligence, valuation or any opinion on price. These sit outside our licence.
- Legal due diligence.
- Recommending whether to go ahead with the deal. We provide the commercial view, and the decision stays with you.
Common questions
