Expedited digital due diligence gives private equity firm validated data to make informed investment decision

Deep-yet-rapid evaluation provided critical insights on the acquisition target's technology and the basis to build a robust equity case

 

The story in brief

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Our client, a top European Private Equity firm, identified strong growth and digital transformation potential in a large, local fitness aggregator. But with just a few weeks to conduct a deep analysis of the target, it turned to Stryber to assess its digital infrastructure and build a detailed picture of digital growth scenarios.  

With our client seeking opportunities for digital expansion and value creation, we assembled a cross-functional team to support. We analyzed everything to provide an overview to inform its offer and guide post-close plans.

THE HEADLINE RESULTS

Comprehensive analysis to make confident investment

Inside 24 days, we produced a realistic, neutral assessment of the target’s digital capabilities. Our swift and detailed work enabled our client to confidently make a ‘go’ decision, knowing its digital thesis was sound and with multiple opportunities to increase value post close.

Assessment of Digital and Technological Capabilities | Private Equity Success Story | Digital Due Diligence | Stryber

Assessment of digital and technological capabilities

Compiled detailed investment committee memorandum | Private Equity Success Story | Digital Due Diligence | Stryber

Compiled detailed investment committee memorandum

Three scenarios for max post-purchase value | Private Equity Success Story | Digital Due Diligence | Stryber

Delivered three scenarios to ensure max post-purchase value

Our 6-step process for success

Comprehensive assessment

The pivotal first step was to assess the acquisition target's tech and product set-up - excluding a detailed code review.

 
Comprehensive Assessment | Private Equity Success Story | Stryber

Market analysis

With a solid understanding of the acquisition  target's set-up and technology, we analyzed the market and its dynamics to provide a growth roadmap.

 
Market Analysis | Private Equity Success Story | Stryber

Digitization opportunities

Based off the base case vision and market analysis, we surfaced opportunities for digital expansion to deepen market penetration.

 
Digitization opportunities | Private Equity Success Story | Stryber

Ecosystem opportunities

Working from the upside case vision, we sourced ecosystem opportunities for rapid market expansion, accelerated growth, and value creation.

 
Ecosystem opportunities | Private Equity Success Story | Stryber

Detailed roadmap

For both the base and upside case vision, we produced a product and tech roadmap to demonstrate how the acquisition target could grow. 

 
Detailed Roadmap | Private Equity Success Story | Stryber

Investment case

Finally, we handed over a detailed financial analysis covering three scenarios for overall investment focused on costs.

Investment Case | Private Equity Success Story | Stryber

THE FULL PROJECT BREAKDOWN

The challenge: Sizing the digital opportunity for expansion, including base cost and upside scenarios

Our client’s investment thesis hinged on several digital strategies, including home expansion and global partnerships. But the target was relatively new to its own tech journey, leaving big questions about whether existing digital capabilities could support expansion and value creation. Our remit was to raise red flags, uncover blind spots, and guide decision-making related to the technology.

 

ATOM

Decipher base cost and business model scalability

With the target still relatively immature, we needed clarity around existing operating costs and scalability potential of its digital business model.

 
STRATEGY

Identify expansion opportunities and risks

Our client wanted as clear a picture as possible of the target’s market expansion opportunities and the associated risks of entering each.

STARTUP

Produce costed product expansion roadmap

Our client needed a breakdown of expected investment levels to deepen penetration in the target's existing market and enter new ones

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Operating at light speed

Grasping the project complexity

The time frame was limited, and the array of components requiring analysis was vast. We were allotted a mere three weeks to perform our due diligence and contextualize the findings.

The timeline was further exacerbated by a constrained disclosure process, meaning our team had to be ready to respond at a moment's notice.

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Turning over every stone with precision and depth

We quickly mobilized a senior, PE-grade team to work on site. The objective was to review all the documentation and be present in the "war room" with the client and advisory teams to present and discuss findings. 

Half the team focused on near-term issues around digital maturity, scalability, technology infrastructure and product roadmap; the other half looked at market dynamics, white spaces, competitive differentiation and barriers to entry.

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Faultless stakeholder management and rigorous process

With a large pool of players and limited time for internal alignment, stakeholder management was key. We held daily calls with the client, weekly calls with digital partners and other buy-side advisors, and attended a series of all-party readouts with the MD and key stakeholders.

Maintaining documentation and crystal clear communication, we produced an equity case inside the deadline and ensured our client understood the details.

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OUTCOMES & IMPACT

3.5 weeks, 3 time zones, 1000s of data points: one independent validated investment memo

Our due diligence work culminated in a comprehensive equity case comprising three core deliverables.

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Due Diligence: A detailed red flag assessment of the target's current digital and technological capabilities, including competitor and best-practice benchmarks and key points of product differentiation.

Investment Committee Memo: A key document in justifying the investment decision, this powerful one-pager summarized our view of Fife's digital strengths and weaknesses, the upside opportunities, and recommendations for realizing them.

Plans and Scenarios: We delivered three detailed product plans to unlock the target's full potential post-purchase, including feature-based roadmaps, staffing requirements, and detailed financial analyses for each plan.

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We combine commercial acumen, strategic insight, rigorous due diligence, and a venture capital mindset to identify the right acquisitions and unlock the full potential of your portfolio. Identifying risks, inefficiencies, and growth opportunities, we ensure digital assets align with overarching fund and portfolio company goals.

Ultimately, we bring your digital vision to life with a hands-on approach, ensuring each initiative is seamlessly operationalized to drive efficiency, growth, and tangible results. Working closely with your team, we focus on strategic alignment, resource prioritization, and flawless execution to transform digital plans into measurable gains that boost valuations.