Commercial due diligence for an ultra-niche, data-scarce market.
- A calcium phosphate company is ready to sell, but struggling to articulate its market value to potential investors.
- We designed a bespoke market-analysis framework, steadfastly ensuring the data would stand up to investor scrutiny.
- We lifted the lid on a data-scarce sector with the blend of intuition, practical analysis and business intelligence that comes with decades in the game.
- We carried out additional market research for the PE investor, wading into awkward but necessary situations to get the deal done. Happy seller, happy buyer.
Commercial due diligence for established markets is strategy consultants’ bread and butter. But you’ll rarely find a major consulting name willing to stretch it to its nichest extremes. The calcium phosphate market, say.
This mineral compound has select, but life-altering, uses as a substitute for bone. Calcium phosphate is as niche as it gets — no copy-paste due diligence offering would work. And the CEO of our bioceramics client was ready to sell, but data scarcity was undermining the firm’s ability to demonstrate its value to potential investors.
Bernadette Wijnings, founder of The Strategy Office, and Paul van der Torre, strategy consultant at The Strategy Office, shaped a winning case to a private equity buyer, adding the bioceramics firm to its €250 million fund.
Challenge.
Our client had already seen one sales deal collapse; private equity walked as the firm failed to data-savvily articulate its sector landscape and market share. With a second PE buyer interested, the stakes for making a solid quantitative case were high.
As with most niches, there was little easily-usable data for the calcium phosphate market. Multiple reports, yes, but all using different frames of analysis. If you’re trying to directly compare powder vs granules vs blocks, nothing adds up.
Approach.
Bernadette pooled the disparate market data available, pinpointing the crossovers in need of a closer look. Throughout the project, she stayed steadfastly behind the analytical framework she’d designed to generate a market overview. This was the only way to make sure the data were flawlessly traceable, and have the market analysis stand up to investor scrutiny.
Paul’s medical background (he’s a doctor by training and co-founder of a digital health startup) accelerated arriving at correct use case interpretations, too. Produced pure, on-spec, and by a handful of specialist firms (our Netherlands-based client sold exclusively to international companies), the compound is used:
As a spray-on coating for titanium joint replacement implants (it encourages patients’ natural bone to fuse with implants)
To repair damaged or broken bones (with potential for 3D bone printing)
In dental implants and bone-based cosmetic fillers
To carry active ingredients in pills
Next up: making sense of these intersecting verticals, production formats and value chains. To keep things clear, Bernadette and Paul used the blend of intuition, analysis and business intelligence that comes with decades in the game.
They’d go bottom-up, to corroborate top-down.
Pure practicality: lifting the lid on a data-scarce market
For each vertical, the bottom-up analysis took a variation on this format:
If there are X joint replacement procedures per region
And we segment these by type (aka body part: hips, knees, shoulders)
And we know the respective volumes of coated and uncoated implants
Then we know volumes of calcium phosphate coating needed by type
And if we also know grams of compound required per medical procedure
Then we know how much compound is used
Then we can put a price on it
Then we have a market
In parallel, the top-down approach tested whether their bottom-up numbers held. Quantifying the market as a whole led to a clear picture of the client’s share; the bottom-up data reliably indicated growth rate; and qualitative context rounded the analysis out.
A shrewd investor leverages our insight
The due diligence we’d put together had the client happy, and a German PE interested. But, ever sticklers for detail, the PE wanted more. They brought Bernadette on for additional market research, interviewing the original bioceramics client’s competitors, alongside (academic) field experts. An intricate project dynamic, managed with maturity and ease.
With a small-to-non-existent sector network readily available to her, Bernadette approached her interviewees via LinkedIn and cold calls. Getting on with things this way didn’t bother her in the slightest; a serial entrepreneur, she has the guts to wade into awkward but necessary situations — and get results.
Even with an objectively bad sell, too: 30 minutes of strangers’ time for nothing back. But, if you happen to be no-nonsenseand likeable, you just get it done.
Impact.
Happy seller, happy buyer
The full scope of work got the sale done, with the German PE convinced to scoop up the original bioceramics client.
For this niche market, a determinedly practical approach to analysis was the only thing for it. But that’s our sweet spot at The Strategy Office; fortunately for clients like this bioceramics firm, as plenty of larger consulting names wouldn’t have taken on the case.
With us, you still get senior consultants with decades of experience. Just without the ego or the overheads.