Due diligence drives PE firm’s profitable investment in digital advertising
Posted by | Fuld & Company
Fuld & Company helped a mid-market private equity firm assess a high-potential investment in a digital advertising company. Informed by Fuld’s in-depth market analysis, insights, and competitive intelligence, the firm proceeded with a majority investment that positioned the target company for long-term growth and industry leadership.
Objective
The private equity firm aimed to expand its portfolio with a strategic acquisition in the digital advertising space. Their goal was to:
- Identify the customer trends and growth potential of the digital advertising market.
- Understand the target company’s competitive positioning.
- Mitigate risks and evaluate opportunities for sustainable returns.
The private equity firm required comprehensive due diligence to validate the investment opportunity and ensure alignment with their long-term strategy.
Solution
Comprehensive Market Assessment
Fuld & Company conducted a rigorous market analysis tailored to the digital advertising sector. Key deliverables included:
- Market size and segmentation:
- Calculated the total market opportunity for digital advertising, segmented by in-house capabilities versus purchased solutions.
- Analyzed adoption trends for digital extension services among advertising agencies and local media companies.
- Customer behavior and purchase trends
- Identified key decision-makers influencing the adoption of digital advertising platforms.
- Explored the perception of digital solutions among local media sellers as tools to drive revenue and commissions.
Competitive intelligence
We conducted a detailed comparative analysis of the target company versus competitors in the private equity investment, focusing on:
- Pricing strategies, product offerings, customer service, and capabilities.
- Key opportunities and risks for digital extension providers over the next five years.
Integrated Research Methodology
To ensure actionable insights, we employed a mix of:
- Desk research to assess industry trends and market dynamics.
- Expert interviews to provide qualitative depth.
- Quantitative surveys to validate key findings. Our approach unlocked new opportunities for the private equity firm.
Outcome
Fuld’s analysis provided the private equity firm with:
- A comprehensive understanding of market potential, confirming a favorable investment landscape.
- Detailed insights into the target company’s value proposition, customer adoption risks, and opportunities for growth.
- A strong foundation to proceed with a majority investment. This step was crucial in the private equity strategy.
The investment enabled the development of a scalable, innovative digital advertising platform. Supported by Fuld’s ongoing guidance, the portfolio company has enhanced its product offerings and customer service, solidifying its position as a leader in the digital advertising space.
Tags: case study, Digital Transformation, private equity, Strategic Planning