Case Study – Due Diligence on Technology Roadmap

Background and Problem

A private equity firm was considering investing  in a medical products manufacturing company. The partners were not sure about the technical soundness of the manufacturer, nor could they believe in the forward looking statements with regard to new products, and technology.

The Solution

A thorough audit of the firm’s products, technology and road map was conducted. This was evaluated against their competitors, and trends in the respective market segments. It revealed likely regulatory issues that lay under the surface, and the fact that much of the product line was me-too. In our view, the lack of innovative or differentiated products and technologies, coupled with the costs of dealing with the regulatory risks the premium valuation the manufacturer was asking for – could not be justified. We advised the investors accordingly.