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One of the largest sawmills in the U.S., was looking for ways to reduce and/or reuse its wood waste. It decided to explore converting waste into firewood and found a potential acquisition opportunity in a company that sold consumer firewood products. They needed to determine if this acquisition was worthwhile.
Larx Advisors was engaged to perform a detailed buy-side due diligence analysis. Unlike other consultancies, Larx offered expert guidance and excellent service at an affordable price point. The due diligence included:
After performing the detailed analysis Larx delivered a Confidential Information Memorandum (CIM) advising against an acquisition since research indicated it wouldn’t be a lucrative move. It made a recommendation to instead make new capital investment in sawmill equipment to reduce waste levels and increase margins. The larger family office behind the lumber company was impressed with the results and the bold recommendation to not purchase the company, so it engaged the Larx team in a sell-side preparation for another portfolio company.
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