Operational Due Diligence (ODD)

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In an environment where one transaction involves two or more companies, one of the main levers for boosting this integration are the inherent operational synergies. Our team of experts combines an approach to value enhancement, industry specialists and our capacity for implementation to help identify, quantify and capture this sustainable value in your business.

An operational due diligence (ODD) is the first phase of the value creation process that provides the knowledge necessary to improve the performance of target companies or to demonstrate the value of the companies to be divested. On numerous occasions it forms part of an integrated due diligence, which includes the commercial, financial and legal due diligence, and is aimed at reducing uncertainty in all aspects of the transaction providing an independent and detailed business evaluation.

PwC provides the reports that support the opportunities for value creation and risk mitigation. Moreover, we assist in the development and execution of the plan for the obtention of value.

Potential problems

A situation requiring ODD includes:

  • Changes in profitability owing to changes in the cost of materials, hiring structure or supplier base.
  • Changes in the supply chain that have an impact on future  profitability or assumed risks.
  • Operational footprint: low-cost production, plant relocation, downsizing capacity and capex analysis.
  • Evaluation and control of the impact of the innovation plans and continuous improvement programs.

How we can help

  • We identify implicit business risks such as production costs, quality, restructuring programs, capex, etc.
  • We identify, quantify and prioritize improvement levers such as lean production, supply chain, working capital, etc.
  • We draw up a dedicated action plan to ensure a simple acquisition of control and mitigate transition risks.
  • We design a footprint and future organisational structure including control and follow-up tools.

Look at Strategy & Operations Solutions