Caravel’s Unique Approach to Due Diligence

Verifying True Worth and Post-Acquisition Potential

When we conduct due diligence, we’re wearing two hats: analyst and future operator. First, as analysts, we verify the immediate worth of the target company, examining its financial performance, asset condition, market position, and operational health to confirm that the business is fundamentally sound. But we don’t stop there. Equally as important, we evaluate the company as future operators would, asking: How much better could this business perform after acquisition? What is the upside in efficiency, throughput, cost reduction, and growth with the right changes in place? By leveraging our extensive experience in evaluating and running manufacturing plants, Caravel can assess a facility’s future potential with unparalleled depth. We bring in benchmarking data and seasoned expertise from having evaluated over 400 sites to gauge what “good” looks like in that industry. This lets us quantify improvement opportunities in areas like yield, uptime, energy usage, and labor productivity.

In practice, this dual focus means our due diligence reports contain both a rigorous assessment of current-state performance and a projection of achievable performance. For example, in one recent engagement our team benchmarked the operating performance of 44 manufacturing sites globally against industry best practices. We identified performance gaps and then developed a 3-5 year improvement plan for each site, outlining how to close those gaps. By the end of the diligence, we had formed a clear point of view on what the acquisition was truly worth to the client, factoring in over $300 million per year in potential synergies and improvements that could be realized post-acquisition. This level of insight gave our client the confidence to proceed with the deal and a roadmap to unlock tremendous value. In another case, our due diligence team identified hidden yield improvement opportunities in a chemical plant’s process (e.g. optimizing feedstock usage and recycling by-products) and highlighted them as part of the deal’s upside. The bottom line: we ensure our clients are not paying for value that isn’t there, and that they don’t miss out on value that could be there. We make a clear-eyed assessment of a facility’s future potential, enabling informed investment decisions.

Providing Strategy and Vision from Pre-Deal to Post-Deal

Most consultancies hand over a thick due diligence report and consider their job done. At Caravel, we take a different view. We believe in providing a strategic vision that spans both the pre-acquisition and post-acquisition phases. From the earliest stages of diligence, our team is already crafting the outline of a game plan for the asset’s next steps. This includes high-level strategy (e.g. how the acquisition fits the client’s existing operations or portfolio, and what strategic shifts might be needed) as well as tactical plans (e.g. key operational improvements and capital investments over the next few years). We answer questions like: How will we integrate this plant into our network? Where are the priority areas for improvement? What synergies should we bank on, and what investments or restructuring might be required? By addressing these in diligence, we give our clients not just a snapshot of the target, but a vision for its future.

Crucially, we don’t just formulate this vision, we also stick around to help execute it. Caravel’s team has mastery in post-acquisition integration; many of us have walked in the shoes of plant managers and operations leaders responsible for bringing new acquisitions online. We leverage this experience to ensure that when our client buys a company, they can integrate it seamlessly and start realizing benefits quickly. For instance, in the global 44-site acquisition mentioned earlier, not only did we identify massive synergies, but we also developed a global Operations Excellence program framework and a technology investment plan during diligence to guide post-deal improvements. This strategic foresight meant that on Day 1 of ownership, the client had a ready-to-launch improvement program. In another project, we worked with a client during diligence to draft an integration plan that would consolidate low-performing facilities and re-focus production on higher-margin products. By the time the deal closed, the client had a clear vision of which sites to rationalize and how to reconfigure their network, essentially a head start on executing the value creation plan.

Our pre/post integrated approach is especially valuable to private equity firms and corporate development teams, who need to know not just if an acquisition target is sound, but how it will deliver on the investment thesis. In fact, Caravel’s diligence approach often enables investors to bid more confidently (and even more aggressively) on targets, because they have a concrete plan for post-close value creation and know they can “make back” any premium via the improvements we’ve identified. And for corporate acquirers, having a post-deal vision ensures the acquisition supports their strategic goals and doesn’t languish as an isolated asset. We provide that connective tissue between strategy and execution, bridging the deal and integration phases.

Delivering Ongoing Improvement Support Beyond the Report

One of the biggest differentiators of Caravel Solutions is that we don’t view the due diligence report as our finish line. Instead, it’s the starting line for tangible improvements. We pride ourselves on delivering ongoing business improvement support well beyond the initial deal closing. In practical terms, this means our engagement with the client often continues into the integration phase and far into the steady-state operation of the acquired business. We offer hands-on assistance such as deploying our experts on-site to lead or coach improvement initiatives, providing interim management if needed, and establishing continuous improvement programs to sustain momentum.

Why do we do this? Because our mission is to create real, lasting value, not just PowerPoint slides. We’ve seen too many cases where a traditional due diligence ends with a report that outlines opportunities, but the client struggles to act on them. This can be either due to bandwidth constraints, resistance to change at the plant level, or simply lack of a detailed execution plan. Caravel eliminates that gap. For example, after completing an operations due diligence for a chemicals company (identifying dozens of process improvement ideas and risk mitigations), we didn’t just hand over our findings, we helped the client kick off a 3-year operations excellence initiative to capture those opportunities. Our team members were on site day one post-close, assisting local teams in implementing projects like distillation automation improvements, feedstock optimization, and maintenance best practices. As a result, the company achieved >$45 million per year in savings within 2 years, exceeding the original plan.

Unlike many consultants who leave after the diligence phase, Caravel “stays in the boat” with our clients. We offer post-close support to ensure a smooth transition and sustained operational improvements, providing a full spectrum of services from the initial evaluation all the way to long-term performance optimization. In practice, this could mean establishing a central Operational Excellence (OpEx) team for the client, as we did for a manufacturing firm to steward and sustain best practices after an acquisition. It could also mean mentoring plant managers and their staff in the new operating processes, conducting periodic audits, and adjusting the improvement plan as conditions evolve. Our philosophy is that real value is realized on the factory floor, so that’s where we continue to work, long after the deal makers have moved on to the next transaction. By delivering this ongoing support, we help clients lock in the gains identified in diligence and often uncover additional improvements over time. The result is a partnership mentality: we are as invested in the success of the acquisition as our clients are, and we measure our success by the tangible results achieved, not just the delivery of a report.

Emphasis on Value Creation, Process Optimization, and Operational Integration

At the core of Caravel’s approach is an unwavering emphasis on value creation. Everything we do in a due diligence engagement is geared toward answering: How can this business create more value, and how do we make it happen? We zero in on the 3-4 key levers of value for each operation rather than getting lost in minor details. By prioritizing the most impactful improvement opportunities (be it a cost driver, a throughput bottleneck, or an organizational inefficiency), we accelerate value capture and set the foundation for sustained success. This focus might translate to identifying a “hidden plant”, untapped production capacity that can be unlocked by debottlenecking processes, or spotting an unprofitable product line that should be rationalized to boost overall margins. We combine process optimization expertise (lean manufacturing, Six Sigma, maintenance and reliability excellence, etc.) with a pragmatic business sense to recommend changes that truly move the needle.

Furthermore, our approach is holistic. We examine all critical dimensions of the operation during diligence: the equipment and assets (are they reliable, well-maintained, technologically up-to-date?), the systems and structures in place (are there robust processes and KPIs? any “disjointed” systems that impede efficiency?), the people and organizational culture (does the plant have the right skills and leadership? is the culture aligned with continuous improvement?), and the external factors (supply chain, customers, regulatory compliance, etc.). By evaluating the business from multiple angles, we ensure that our improvement plans address operational integration in the fullest sense, not only integrating the new acquisition into the parent company’s structure, but also integrating processes, technology, and culture within the acquired entity itself. This might involve establishing common operating standards across all plants of a portfolio company, or introducing new digital tools alongside training to improve decision-making on the shop floor. In short, we look at the whole picture of how the operation can create value.

Process optimization is one of our specialties. Our team’s deep operational expertise (including in methodologies like Lean, Six Sigma, advanced process control, and asset management) allows us to design targeted initiatives to eliminate waste and boost efficiency. For example, we might identify that a plant’s cycle times are lagging and apply Six Sigma techniques to reduce variability, or we might find excessive downtime and implement a reliability-centered maintenance program. We tie these improvements directly to financial outcomes such as reducing changeover time by 30% to increase annual output, or improving yield by 2% to save millions in raw material costs. Our due diligence findings often include these specific optimization ideas with estimated ROI for each, which helps our clients prioritize their post-acquisition actions. In one case, our analysis of a phenol manufacturing business pinpointed technical improvements (like better process control and energy recovery tweaks) that could increase yield and throughput, contributing to an estimated $140-200 million per year in upside. Such insights, when implemented, translate into concrete value. In that instance the client (or actually the eventual buyer) achieved about $185 million per year in actual improvements by executing the plan.

Operational integration is another pillar of our approach. By this we mean ensuring that after acquisition, the new business unit doesn’t operate in a silo, but becomes a fully integrated part of the parent company’s operational model and culture. Caravel often helps clients develop what we call an “Operating Platform” or common playbook. For example, for one global manufacturer, we assisted in creating a standardized Operations Excellence framework and set of best practices during a major acquisition; this framework was later leveraged to assimilate subsequent acquisitions as well. We helped the client build a central OpEx organization to drive these best practices across all sites, old and new. The emphasis on integration ensures that synergies are not only identified on paper but are actually realized through harmonized operations. In practice, this might involve aligning maintenance systems, unifying KPIs and reporting, merging supply chains, and facilitating knowledge transfer between the acquired plant’s staff and the rest of the organization. Caravel’s background in direct operational roles means we know how to get buy-in from plant personnel during integration, we pay attention to change management, training, and clear communication of the “why” behind new practices. The outcome is that acquisitions start performing like a natural extension of our client’s business, not an outpost. And because we focus on value creation above all, the integration work is laser-focused on things that drive performance: for instance, standardizing a production scheduling process that increases throughput, or rolling out a reliability program that cuts downtime by 15%. These efforts directly contribute to measurable ROI, which is ultimately how we and our clients judge success.