Case study: Financial investors

Commercial Due Diligence of a leading Domiciliary Care Services provider

The Problem: Commercial Due Diligence of a leading Domiciliary Care Services provider

Our client, a large-cap European focused Private Equity House, was considering the purchase of a leading UK Domiciliary Care services provider. It asked Credo to provide the Commercial Due Diligence of the target and its core markets.

Our Approach: Demand and Supply side market review of the UK Social Care services market

Credo performed a highly detailed market view of the Social Care services market, concentrating on the Domiciliary Care, and associated Supported Living, markets that the client focused on.

We provided a comprehensive demand-side review of the market, analysing key volume dynamics (impact of ageing and changing demographics, emphasis on care in a home setting, change in Local Authority eligibility criteria), pricing trends (impact of austerity on pricing, contracting models and supplier power to resist pricing pressures) and key procurement changes (length and type of contracts etc.). We also performed supply-side analysis, ascertaining key changes in the supply-base structure, understanding the financial performance (and reasons behind this) of key competitors and their potential future strategies. This allowed Credo to create a clear view of the competitive positioning of the target, and identify future risks and opportunities to its projected financial performance. This report was then used by the PE client as part of its Investment Committee process.

The Result: The PE House decided not to progress with the transaction

As a result of the various Due Diligence activities undertaken as part of the process, the client decided not to progress the transaction, partly due to the risks outlined within the CDD report.

Contact

Ed Matthews
Ed has a wealth of experience operating across Credo's core sectors, with particular expertise in the Health, Social Care and Social Housing sectors. He has undertaken a range of strategic, due diligence and operational improvement engagements, working for a number of the leading private providers of Health and Social Care services, spanning the UK, European and Global markets.
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