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Hiring a Freelance Due Diligence Expert

Why and when you need a Commercial Due Diligence Expert

Many investors, be they Private Equity firms or corporates, require an independent and thorough investigation of acquisitions they consider or major investment projects they are about to commit to. There are various reasons for conducting Due Diligence: from basically ensuring you’re not buying “a pig in a poke” or being saddled up with “skeletons in closets” … to insightful analyses of new markets, strategic upsides, potential synergies and, ultimately, gaining greater confidence in business plan projections. Hence, there are various forms of due diligence ranging from the traditional Financial, Tax and Legal Due Diligence to more strategic and business plan-oriented Commercial and Operational Due Diligence.

Such forward-looking Commercial Due Diligence (CDD) is a sine qua non if the target company’s business plan forecasts significant growth projections beyond historical rates, appears to rely on insufficiently supported assumptions, is dependent on new strategies or a budding digital transformation, or includes major operational improvements. The CDD analyses result in an independent and comprehensive view on business plan projections with sufficient granularity that can feed straight into the investor’s valuation model.

Independent and well-executed Commercial Due Diligence allows investors to test their investment hypothesis and gain greater confidence in a target company’s business plan projections. It also can provide reassurance to (co-)financers like banks.

In many cases the optimal approach is to assemble a tailored team consisting of an independent senior CDD expert and cherry-picked industry experts or digital transformation experts, sometimes in close collaboration with the investor’s own team members. With the CDD expert at the helm, the due diligence report can effectively leverage industry experts’ knowledge supported by well-formulated hypotheses and story-lining. This will ensure strong focus on the business plan projections and delivering a bankable report with minimal stress on the client’s side. Outvise can put together such a tailored CDD team in just 48 hours.

Find and hire the best and most qualified CDD freelancers through Outvise paying only for the time/project you need them.

Certified Due Diligence Experts in the Network

case study
CDD case study for a private equity firm

Challenge, Context, Problems to be solved

The private equity firm is contemplating an investment in a value-add installation company, but has questions on industry challenges and organizational readiness for Buy & Build.

Mission, tools and methodology

CDD expert-led team including 2 local senior industry experts conducted during 3 weeks an independent analysis and interviews with target company management & major clients, focusing on key issues.

Achieved results

  • Bankable report addressing key industry challenges and organizational readiness for Buy & Build growth.
  • Assessment of Business Plan.
  • Clear recommendations towards organizational strengthening. 
  • Identification of upsides.
  • Input for negotiations on final terms.
  • Deal successfully completed with clear value creation path

Andre
CDD expert, M&A Project Director, PE & VC advisor

Must have skills for Commercial Due Diligence Expert role

At least a decade’s experience in strategy consulting and particularly also in senior CDD roles:

  • Relentless focus on business plan projections as well as strategic upsides
  • Deeply ingrained hypotheses-driven and storyboard-led work approach
  • Inquisitive mind that thrives on evidence-seeking
  • Strong analytical and numerical skills 
  • Strong (senior) interviewing skills
  • Strong Board-level reporting skills
  • Extensive project management experience including ability to lead senior industry experts

Challenges & Hot topics for a CDD expert

A common misconception is that Commercial Due Diligence is about collecting mountains of market data and stuffing powerpoints full of statistics. On the contrary, a well-executed CDD begins with investment hypotheses and business plan drivers. From here, we focus on gathering relevant information to assess the acquisition’s strategic rationale and business plan projections. As such, a market analysis is a means, not an end.

Moreover, often the best insights come from deep-dive interviews with key market parties and experts. Especially now with the impact of Covid and rapid digitalisation, major uncertainties must be addressed, and scenarios to map the range of potential futures and their shaping forces need to be analysed.

In the end, Commercial Due Diligence should be about business plan drivers and projections as well as understanding scenarios, sustainability and sensitivities, therewith enabling investors to test their investment hypotheses and even simulate different outcomes.