The model works. The question is whether the operator does.
Financial diligence tells you what the business has earned. It does not tell you whether the plant can hold the throughput the projections assume — and in off-site manufacturing, that is usually where the value sits. Operational diligence runs two to three weeks and delivers a written view on whether the operating assumptions hold.
The pressures
Operating performance is opaque from the outside.
A plant tour and a set of financials will not tell you whether designed capacity is achievable, or whether the last three good quarters were structural or fortunate.
The sector attracts optimistic projections.
Modular manufacturing has a long history of business plans built on throughput numbers that the line has never actually produced.
Key-person risk is common and under-disclosed.
In many plants the process lives in two or three people. That is a valuation question and it rarely appears in the data room.
Post-close integration is where returns are made or lost.
The operational improvements underwritten at acquisition need someone who can actually execute them.
How we help
- Operational diligenceAn independent read on whether the plant can do what the model assumes. Capacity, quality systems, data systems, supply chain and key-person exposure.
- Business planning & developmentFinancial modeling and market validation for the thesis, built from operating reality rather than sector averages.
- Manufacturing & plant systemsThe post-close improvement programme — and the people to run it, including in a fractional operating capacity.
- Data systems & digital operationsReporting that lets you see the portfolio company clearly month to month, rather than waiting for the quarter.
How an engagement usually starts
With a target under exclusivity and a question the financial diligence cannot answer. Operational diligence typically runs two to three weeks and delivers a written view on whether the operating assumptions hold. We have done modular manufacturing business plan development, financial modeling and plant design work for a private equity firm, so the format of what an investment committee needs is familiar.
Where a deal closes, the same team frequently carries into the improvement programme — which means the people who identified the gaps are the ones accountable for closing them.
Two things you can do without talking to anyone
The same diagnostic, pointed at a target
The Operational Fitness Assessment is the framework we use in diligence, in short form. Running it against a target will give you a sense of what a full assessment would surface — and which questions to ask before you commit.
Take the assessmentEngagement snapshots
Anonymized snapshots and methodology artifacts — the disciplines and approach, without naming clients.
View engagement snapshotsLooking at a target?
Thirty minutes, under confidentiality. Tell us what you are underwriting and we will tell you what we would want to see.