Acquisition Due Diligence Highlights Cost Synergies

Hunter Manufacturing (HDT)

Solon, Ohio

Challenge

$250 million global defense manufacturing Company of mobile infrastructure and portable power generation equipment and defense systems. $30 million debt


  • Company business strategy to expand internationally through acquisitions to meet the increasing need of mobile military defense
    systems globally.
  • Company management resources were limited and strained just to keep up with the growing demand for their existing products.
  • Limited management resources required assistance to evaluate, qualify and quantify potential acquisition economic viability regarding operational synergies, business viability, operational performance and effectiveness and efficiencies and cost savings synergistic
    opportunities.

Solution

  • MorrisAnderson retained to perform operational assessment, validate target company historic performance and the company’s business
    plan and identify operational synergies to reduce costs.
  • Performed an operations assessment which identified synergistic opportunities; cost reduction opportunities in manufacturing,
    distribution, inventory control, logistics and order fulfillment areas.
  • Provided re-vamped organization alignment and structure to implement the synergistic re-engineering changes, inventory reductions
    and right sizing opportunities designed to perpetuate efficiencies going forward.

Results

  • MorrisAnderson concluded that the target acquisition company had a sustainable core business, supportable business plan and a core value proposition that is sustainable.
  • Synergistic cost reduction and efficiency improvements exceeding several million dollars annually were achievable via the acquisition by re-alignment of the company’s management control structure and consolidating facilities which positioned this Defense Contractor to increase market share and improve profitability.
  • The Defense Contractor will realize several million dollar annual profit improvement via synergistic right-sizing initiatives in manufacturing, distribution, logistics, inventory control and administrative support functions.