Service line · Strategic Advisory
Sector & Target Diligence
When this fits
Diligence runs at two levels, and most engagements need both: the sector — is this a market worth being in, and where is it heading — and the target — is this the right asset in it, on the right terms. We read them together, because a target only makes sense against the sector dynamics that will define its next five years.
- A PE or strategic considering acquisition of a player in HMOs, enzymes, precision fermentation, or adjacent specialty ingredients.
- A board needing an independent operator's read on a take-private or a bolt-on thesis.
- A diligence supplement to a bank-led M&A process — the inside-the-industry operator read that complements the financial workstream.
What you get
- A 30–60-page diligence memo, written for the deal team and the board.
- Named-source triangulation across public filings and warm-network conversations (subject to engagement confidentiality).
- A forward call — buy / watch / pass, with the analytical case.
- Two read-out sessions with the deal team.
- Optional follow-on: post-acquisition integration scoping.
Patterns I've seen
Engagements are confidential, so we don't name clients. What follows are recurring patterns I have seen across sector-diligence work in industrial biotechnology and specialty ingredients.
Pattern I've seen
When the consensus market-size estimate is the diligence question
In a recent diligence pass on a specialty-ingredient target, the published consensus market size diverged about 19% across three widely-cited sector publishers — and that divergence was the diligence question, not a side note.
The fix is not to pick one of the published numbers. It is to reconcile the methodologies, show the deal team what each estimate is actually measuring (ingredient market vs addressable market vs end-product market — three different things, often labelled the same), and defend a range with named anchors. The reconciliation is the analytical product.
For investors the practical point is: a 19% spread between paid reports is not a defect in the data, it is a signal that the underlying definitions disagree. A diligence memo that doesn't address that disagreement explicitly will not survive a board challenge.
Pattern I've seen
When the target's own cost stack hides the real exposure
The cost stack a target shares with a buyer in diligence is usually the cost stack as the target's controller builds it — allocated fixed overhead, plant depreciation by historical book value, energy at last year's contract terms. That accounting picture is true for the past, and almost always wrong for the future.
What matters under acquisition is the marginal economics under the buyer's operating assumptions: the next tonne produced, at the buyer's cost-of-capital, with the buyer's energy contracts, against the buyer's actual depreciation schedule. That recalculation regularly moves margin by 30–50%, and occasionally inverts the thesis.
A diligence pass that doesn't rebuild the cost stack from ground truth is reporting the seller's accounting back to the buyer. The diligence value is in doing the recalculation independently — and in being honest when the answer is worse than the seller's.
Sectors we cover
For sectors outside this list, talk to us — we will tell you honestly whether our experience adds value to your decision or whether you would be better served by another advisor.
SUDEVCO provides independent sector and commercial diligence and advisory. It is not authorised or regulated by the Belgian Financial Services and Markets Authority (FSMA), and does not provide investment advice within the meaning of MiFID II, investment recommendations within the meaning of the Market Abuse Regulation (Regulation (EU) No 596/2014), or any other regulated investment service. A diligence forward call is a commercial and strategic view on an asset and its market — not a recommendation to acquire, dispose of, or subscribe for any financial instrument. Clients make their own decisions and should take independent legal, financial, and tax advice.