When a major European energy and infrastructure provider prepared to acquire a larger competitor, the stakes were high. The target’s strong brand image masked years of operational underperformance and heavy debt – a performance gap that required operational insight to fully understand. Through a four-week Operational Due Diligence deep-dive, Mantec uncovered the real drivers behind the target’s challenges, exposed hidden inefficiencies, clarified synergy potential, and identified €4.9–7.1M in improvement opportunities. The result: a clear operational roadmap to support a confident acquisition decision.
Background
A major European energy solutions and infrastructure service provider was preparing to acquire a larger competitor with operations spanning power infrastructure, telecommunications and smart industry solutions.
Despite the target’s strong brand image, the company had struggled for years with poor financial performance and a heavy debt load.
To ensure a sound acquisition decision, the customer commissioned Mantec to conduct a comprehensive Operational Due Diligence (ODD) focused on operational realities, performance drivers and synergy potential.
Operational due diligence
Mantec carried out a full operational excellence review of the target company. The analysis combined quantitative studies, field observations and interviews across all organizational layers.
- Interviews across all organizational levels
From technicians and first-line leaders to managers and directors. - Operational statistical studies
Including productivity, cost drivers, variance, utilisation and performance patterns. - Span-of-control and organizational structure analysis
HR data was used to visualize structural layers and validate responsibility distribution. - In-depth field studies
Observing daily operations, workflows and management practices. - Assessment of performance management systems
From order-to-delivery processes to KPIs, target setting and follow-up routines. - Supplier base and procurement review
Identifying concentration, long-tail suppliers and purchasing practices.
Key findings
The analysis revealed several critical operational gaps that explained the target company’s long-term performance challenges.
1. Management and performance gaps
- Disconnect between first-line management and technicians.
- KPIs existed but were not actively used.
- Lack of variance management and continuous improvement routines.
- Performance management processes were fragmented and inconsistently implemented.
- Over-ambitious management targets in the past had led to low compliance.
- Weak target setting and limited follow-up at operational levels.
2. Organizational structure and resource allocation
- Span of Control was low, indicating unnecessarily heavy organisational structure and unclear roles and responsibilities.
- A recent restructuring had not improved utilisation rates, which remained below benchmark.
*Span of control refers to the number of direct subordinates a manager/ supervisor oversees, indicating whether the organizational structure is balanced, over-layered or stretched too thin
3. Supplier and purchasing practices
- Long tail* of ~2600 suppliers accounting for 25% of purchases created inefficiency.
- Only 175 suppliers covered the majority of spend.
- No centralized procurement process—local decisions and personal relationships dominated.
- The target’s financial distress forced suppliers to require premiums.
*The long tail refers to a large number of small, low-volume suppliers that together account for only a minor share of total spend but significantly increase complexity and inefficiency
4. Project and delivery challenges
- Projects were often started without complete plans.
- Sales-to-execution handover lacked standardization.
- Roles and responsibilities in projects were unclear.
- Limited project performance KPIs.
Quantified improvement potential
While the due diligence highlighted several structural and operational shortcomings, it also revealed clear opportunities to strengthen performance and unlock latent potential. Despite years of weak financial results, the target company possessed a strong brand, established customer base and broad operational footprint — all of which could generate significantly more value with improved structures, clearer processes and stronger management routines.
Mantec identified clear numerical improvement potential:
- Short-term potential: €4.9–7.1M annualized
- Long-term potential: €1.5–1.8M annualized
In addition to the quantified impact, the due diligence revealed multiple underlying levers for improvement, including unused capacity, low utilisation, fragmented process discipline and opportunities in project management, performance routines and procurement. Strengthening these areas would enable faster throughput, more consistent delivery and a more scalable organizational model.
A comprehensive realization plan was developed, outlining the initiatives, timelines and governance needed to capture the full potential. This roadmap provided the customer with a clear and actionable path to value creation following the acquisition.
Conclusion: A solid foundation for acquisition
Mantec recommended proceeding with the acquisition. The ODD confirmed:
- Clear synergy opportunities
- Strong improvement potential
- Defined actions to turn performance around
- A practical roadmap to realize results
The customer decided to acquire the competitor based on the due diligence results.
Looking to reveal the true improvement potential in your operations?
Contact us for a free 45-minute consultation:
Denmark – Bent Hansen bent.hansen@mantec.eu & +45 20 91 46 36
Finland – Eero Vuorensola eero.vuorensola@mantec.eu & +358 40 54 45 200
Sweden – Göran Svensson goran.r@mantec.eu & +46 70 631 86 18
Norway – Jan Erick Olsen jeolsen@mantec.eu & +47 922 68682
Other countries – Kjetil Barfelt kjetil.barfelt@mantec.eu & +47 913 13 131
