Context and question

CIM Capital is a Belgian investment fund focusing on companies in difficulties. Over the last few years, CIM Capital has realized several successful restructurings in Belgium. With their typical hands-on approach and by being involved both financially as operationally, they create “turnaround situations”.

In 2022 they encountered a new target, a software player. After many years of product development, this company developed a number of high-end applications; however, they have not yet managed to accomplish a breakthrough. For instance, because of the strongly prevailing product and inventor focus, there was limited focus on structurally building a customer portfolio with volume opportunities. They also paid insufficient attention to the commercialization of the product according to the potential customer segments. Consequently, in 2022 the company was in trouble and a quick investment decision was crucial to secure its future.

In order to substantiate and accelerate the acquisition decision, positively or negatively, CIM Capital asked us to conduct a market and commercial analysis to complement their financial and technological due diligence. This involved asking the following strategic questions:

• What are the market opportunities of the developed technology?
• With what sharp positioning can the company differentiate itself from the competition?
• Who are the primary and secondary target groups?
• What are the ‘differentiating assets’ that illustrate the company’s unique added value?

Approach

In a first step, we painted a clear picture starting from the inside-out perspective. We analyzed internal documentation as well as business plans for future revaluation. In addition, together with CIM Capital, we set up interviews with various employees in Belgium and abroad. Thus, we mapped current business activities, insights and challenges and took stock of the internal visions and hypotheses surrounding the company’s future.

We then compared the inside-out view with the external perspective. The outside-in analysis consisted of several parts, all aimed at forming a clear picture of the specific market as well as knowing and understanding the target groups. What does the market look like, and how is it structured? What trends, dynamics and evolutions do we see or expect? What do we (not) know about our target groups and their expectations?

We used exploratory interviews to gauge the position of the company, but also that of its competitors, in the market. In doing so, we talked to a wide range of professionals with both technical as well as commercial backgrounds. We complemented this with extensive desk research in which we listed the positionings of other players in the landscape. Their technology was also meticulously compared by our affiliate Mynd, who clearly mapped the patent landscape in relation to the type of technology, players and time.

Finally, we mapped consumer trends and highlighted the motivational drivers associated with their solution.

Based on the confrontation of the inside-out and outside-in perspectives, we were able to determine where and with which proposition the organization best marketed itself in the future. At the same time, we identified the various levers and barriers for the acquisition. We brought all this information together in a well-founded recommendation including suggestions with which CIM Capital could form its decision.

Result

During an expert workshop, we presented and discussed the different insights. More specifically, we presented the following;

• The trends in the market
• The needs/wants of consumers and how to respond to them
• The positioning of competitors
• The added value of the technology

Together, we reflected on possible future paths for the company, utilizing the various areas of expertise present at the workshop.

Supported by our clear strategic-commercial due diligence and advice, complemented by its own expertise, CIM Capital was able to make a well-founded decision on the acquisition of the company.