International Telecommunications Provider

International Telecommunications Provider

by TrueBit Team 18 June, 2016 0

Challenge
One of the benefits of a well-executed due diligence analysis is the ability to use facts uncovered during the process to drive a favorable acquisition price. Identification of key weaknesses such as performance challenges, inability to scale, over-specialization and weakness in target markets is critical when determining the value of an acquisition target.

Analysis
An international telecommunications provider was keen to enter the managed security services market. The provider brought Jason Hengels in to analyze the technical capabilities and target markets of the MSSP. The acquisition target was a company with which Jason was familiar due to his experience with MSSP firms. Over the course of a month, Jason worked with both parties to assess the target’s large portfolio of product and service offerings, which had grown largely by way of other acquisitions. The portfolio spanned 13 products, 7 services, 3 brands and dozens of patents. Using his understanding of the offerings from prior experience, knowledge of the shortcomings common to similar solutions, and a general intuition for where problems might lie, Jason was able to identify key shortcomings in various offerings.

Solution
The resulting analysis, presented in a score-based format, provided the acquiring party with an objective view of the strengths and weaknesses in each product category. While it highlighted a strong talent pool and well-integrated solutions for some offerings, it also exposed shortcomings. Among these were the inability of some technologies to scale without significant investment, challenges in detecting Advanced Persistent Threats, a core service that was falling further behind to competitors and a solution that was very strong in a specific area but very weak in all other areas.

Outcome
The telecommunications provider was equipped with a solid idea of the target’s value and future prospects. This data was used in conjunction with the identified weaknesses to drive a purchase price that was favorable to the acquiring party at less than four times annual revenue. The purchase gave the telecommunications firm a strong foothold in the MSSP market and a solid platform upon which to build a world-class offering.Challenge

One of the benefits of a well-executed due diligence analysis is the ability to use facts uncovered during the process to drive a favorable acquisition price. Identification of key weaknesses such as performance challenges, inability to scale, over-specialization and weakness in target markets is critical when determining the value of an acquisition target.

Analysis
An international telecommunications provider was keen to enter the managed security services market. The provider brought Jason Hengels in to analyze the technical capabilities and target markets of the MSSP. The acquisition target was a company with which Jason was familiar due to his experience with MSSP firms. Over the course of a month, Jason worked with both parties to assess the target’s large portfolio of product and service offerings, which had grown largely by way of other acquisitions. The portfolio spanned 13 products, 7 services, 3 brands and dozens of patents. Using his understanding of the offerings from prior experience, knowledge of the shortcomings common to similar solutions, and a general intuition for where problems might lie, Jason was able to identify key shortcomings in various offerings.

Solution
The resulting analysis, presented in a score-based format, provided the acquiring party with an objective view of the strengths and weaknesses in each product category. While it highlighted a strong talent pool and well-integrated solutions for some offerings, it also exposed shortcomings. Among these were the inability of some technologies to scale without significant investment, challenges in detecting Advanced Persistent Threats, a core service that was falling further behind to competitors and a solution that was very strong in a specific area but very weak in all other areas.

Outcome
The telecommunications provider was equipped with a solid idea of the target’s value and future prospects. This data was used in conjunction with the identified weaknesses to drive a purchase price that was favorable to the acquiring party at less than four times annual revenue. The purchase gave the telecommunications firm a strong foothold in the MSSP market and a solid platform upon which to build a world-class offering.

top