Market and Commercial Due Diligence for a Nigerian Engineering Firm

Africa Capitalworks is a Sub-Saharan Africa-focused private equity fund, part of the broader Capitalworks Group. As a prominent alternative asset manager with a specialized focus on emerging markets, Capitalworks aims to unlock investment opportunities across various sectors, including engineering services.

Africa Capitalworks engaged CrossBoundary Advisory to offer crucial buy-side due diligence services, aimed at evaluating an investment opportunity in a Nigeria-based engineering company. The target company specializes in a wide array of services, including engineering solutions, fabrication, asset management, and galvanizing services. The due diligence was particularly focused on gauging the commercial viability of the target company in the increasingly competitive Sub-Saharan oil and gas sector and assessing the potential for diversification. The Nigerian oil and gas sector represents a substantial market with lucrative opportunities but also faces stiff competition and regulatory challenges. The engineering service sector in this context plays a vital role, offering specialized services that can make or break upstream and downstream operations. As Africa continues to attract investment in this sector, understanding the competitive landscape becomes crucial for successful mergers and acquisitions.

CrossBoundary Advisory employed a two-fold approach to provide Africa Capitalworks with an in-depth analysis for their potential investment:

Market Due Diligence: Assessed commercial opportunities in the sub-Saharan oil & gas space, explored the viability for sector diversification and conducted a comprehensive value chain and competitive landscape analysis.

Commercial Due Diligence: Included an exhaustive review of the target company’s sales, HR, and operations strategies. This also involved scrutinizing its governance structure and detailed evaluation of its business plan.

This meticulous approach aimed to offer Africa Capitalworks a robust understanding of both the market dynamics and the commercial viability of the target company, thereby aiding them in making an informed investment decision.