L-Box*, a leveraged buyout firm, had identified PackageMaster*, a plastics packaging company, as a potential acquisition target. But L-Box needed to quantify the potential benefits before it closed the deal.
For the purchaser, the value of the acquisition would depend on:
- PackageMaster's ability to maintain a leadership position in its core business segment
- the market potential of a new segment and PackageMaster's ability to compete in it
L-Box gave Bain four-weeks to perform the due diligence that L-Box needed so it could move quickly to complete the deal.
Bain focused on four key areas to quickly determine the economic value to L-Box of purchasing PackageMaster.
Although competitors had technical and scale cost advantages, L-Box could still improve operating performance significantly.
Thanks to Bain's quick due diligence, L-Box made an early, preemptive bid for PackageMaster, which went unopposed. Within two years, the acquisition's EBITDA had more than doubled, exceeding L-Box's expectations.