How a PE firm used market due diligence for an investment in dog care  

Posted by | Fuld & Company

A mid-market Private Equity firm specializing in advertising, publishing, and marketing sought to make an informed investment in a digital advertising company. To evaluate the opportunity, the firm needed a deep understanding of the digital extension market, customer trends shaping future growth, and the competitive landscape. Fuld & Company provided comprehensive market intelligence to guide the firm’s decision-making, ensuring confidence in its investment strategy. 

Objective 

The firm aimed to assess the digital extension market, analyze customer purchasing behavior, and evaluate competitive positioning to determine the long-term viability of its target company. 

Solution 

Fuld & Company delivered a holistic solution, combining a thorough market assessment, competitive intelligence, and customer perception study. Working closely with the Private Equity firm, our approach provided it with data-driven insights into key areas, including: 

Market size and potential  

• Estimated the total market size for digital extension solutions among advertising agencies and local media companies. 

• Identified the proportion of the market using in-house capabilities versus purchasing external solutions 

• Mapped the types of digital extension solutions purchased 

Purchase trends 

• Analyzed the role of key decision-makers in organizations adopting digital extension strategies. 

• Evaluated factors influencing buying decisions and the appeal of digital extension solutions for revenue growth. 

• Assed local media sellers’ perceptions of digital extension capabilities. 

Competitive intelligence 

• Conducted a detailed comparison of the target company and its competitors in terms of pricing, offerings, customer service, and capabilities. 

• Identified key opportunities and risks for digital extension providers over the next five years. 

Market due diligence 

• Leveraged insights from media companies, agencies, and competitors to assess digital extension spending, customer adoption, and market demand. 

• Evaluated customer perspectives on the benefits and role of digital extension solutions. 

• Provided a competitive analysis covering pricing structures, organizational size, and service differentiators. 

Results 

Fuld & Company’s insights provided the Private Equity firm with a clear view of the market’s potential, revealing a favorable investment landscape. The research highlighted the target company’s product value, customer risks, and growth opportunities, leading the firm to make a majority investment. 

Within a year, the firm achieved a 2X multiple on invested capital. Fuld continues to support the PE firm’s efforts to strengthen the target company’s reputation through ongoing product innovation and platform expansion. 

Tags: Digital Transformation, Market Insights, Market Intelligence, Mid-market Private Equity