Bryan Moyo MD.
Mergers & Acquisitions
Background
In this project, I assisted in conducting a comprehensive market analysis and due diligence for a logistics company aiming to acquire a last-mile pharmaceutical delivery service. I utilised SWOT analysis , and conducted financial statement reviews , risk assessments providing valuable information that informed the acquisition strategy. The analysis revealed synergies suggesting that the acquisition would result in operational efficiencies and market competitiveness. My recommendations focused on a phased integration approach that minimised disruption while capitalising growth opportunities in the pharmaceutical logistics market.
The logistics company faced the challenge of underutilizing its substantial resources, including delivery personnel and vehicles, amid a limited last-mile delivery market in the developing country where online shopping accounts for only about 1-3% of retail sales. However, with the diaspora community contributing approximately $21 billion in remittances into the region as of 2020 - a significant amount being allocated for healthcare expenses- there exists a significant opportunity in the pharmaceutical delivery sector. The company also faced financial strain due to high fixed costs associated with mantaining a large fleet and workforce without sufficient revenue from last mile operations, making it difficult to justify CAPEX in the last mile delivery service.The company aimed to capitalise on this growth potential by acquiring a specialised Last-Mile Pharmaceutical Delivery Company.
The Problem
Underutilised Assets: High operational costs (e.g. , mantainance,staffing) associated with a large underutilised fleet of motorcycles and vehivles , leading to inneficiencyb in resource allocation.
High Fixed Costs: Financial strain from mantaining a workforce and fleet without generating proportional revenue from last-mile deliveries, leading to suboptimal capital allocation.
Revenue Constraints: Limited market demand for last-mile delivery services, making it difficult to generate returns on new investments in this segment.
Capital Allocation Challenges : Difficulty justifying the CAPEX investment in last ,ile infrastructure without guaranteed demand or clear ROI, leading to hesitation in scaling operations.
Our Solutions
The solution for the Logistics company was to acquire a Last-Mile Pharmaceutical Delivery Company, which allowed the company to address its operational and financial challenges while capitalising on the emerging opportunity in the healthcare delivery market. This resulted in:
1. Optimised Resource Utilization
2. Cost Efficiency
3. Revenue Growth in a Niche Market
4. Strategic Market Positioning
5. Scalable Growth