Temperature controlled packaging

Written By David Williams

A leading, private equity sponsored temperature controlled packaging company sought assistance in positioning itself for sale. Client engaged HBG to conduct a market study and to present findings to leading bidders.

 

Background

  • Client was in the sixth year of ownership by a middle-market private equity sponsor and was preparing for exit

  • Market environment was evolving quickly, with introduction of new environmentally friendly materials and approaches

  • Meanwhile, the pandemic created exciting new opportunities for the company but also threatened established lines of business

  • Company wanted to attract interest from a wide range of financial and strategic acquirers

Client request

  • Develop an objective, third-party study on the temperature controlled packaging market

  • Broaden the prospective buyer universe by explaining complex, technical issues in simple but accurate terms

  • Provide a framework for evaluating the dynamic, COVID-19 related market to account for the surge of vaccine shipments and treatments at a time of overall supply chain disruption

Key issues for consulting team to address

  • Customer demand

    • Underlying market drivers, e.g., life sciences commercial development pipelines, product lifecycles, 3PL evolution, controlled lanes, advanced parameters beyond temperature

    • Trends by product type, shipment configuration, geography

    • Demand by temperature range

    • Impact of COVID-19 vaccines and treatments

  • Macro trends

    • Environmental laws and regulations related to materials, recyclability, biodegradability, reusability, volume

    • Regulatory changes, e.g., FDA/EMA, US Pharmacopeia, temperature controlled distribution

  • Competitive landscape

    • Market share and trends for established players and new entrants

    • Emergence of environmentally friendly technologies

    • Value added services (e.g., pre-conditioning, conditioning, simulation and lane risk studies, technical service)

    • Basis of competition

Health Business Group approach

  • Developed list of key questions and hypotheses based on discussions with client, PE firm, investment bank

  • Performed primary and secondary data gathering

    • Developed hypothesis-driven data gathering templates and interview guides

    • Mined HBG knowledge base, trade press, competitor websites, market research and analyst report

    • Conducted 40 market interviews with current and former customers, experts, competitors, trade associations, and government agencies

  • Synthesized findings

    • Compiled market study highlighting key themes and providing detailed quantitative and qualitative findings

    • Built a market model to quantify baseline assumptions and trends

    • Ran multiple scenarios based on assumptions about the pandemic’s impact, e.g., on worldwide vaccine distribution

  • Supported sale

    • Presented findings and answered questions for interested financial and strategic buyers

    • Conducted targeted research to address follow-up questions from buyers

Outcomes

  • Produced insightful, comprehensive, third-party study that enhanced credibility of client’s pitch

  • Provided support for challenging questions during sales process that exceeded what management or banker could do

  • Company attracted significant interest and was ultimately sold at a valuation that exceeded seller expectations  

David Williams
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