Buy-side commercial due diligence on a C&I heat pump company

LCP Delta was commissioned to undertake a Commercial Due Diligence exercise on a commercial & industrial heat pump manufacturer based in Ireland. We helped inform the investment committee decision on whether or not to proceed with the acquisition.

The client background

Our client, one of Europe’s largest renewable energy investors, was looking to acquire a commercial heat pump business based in the UK and Ireland. The report that they commissioned from us provided them with information to inform their investment into their target company.

The key questions

The client has previously made investments in battery, EV charging and residential heat pump companies, but had not yet acquired a C&I heat pump company. The client needed confidence in the market outlook for C&I heat pumps, the policy landscape and the competitive positioning of the target company to get buy in from its investment committee to proceed.

Key points that our work needed to address were to:

• Provide an assessment of the UK and Ireland C&I markets for heat pumps
• Provide an overview of historic sales, current sales and forecasts
• Provide an understanding of key market trends, barriers and drivers
• Estimate the market size and potential for the target company
• Provide an overview of relevant policy and regulation
• Assess the competitor landscape and how the target’s offerings compared to others on the market

Our solution

Utilising our existing in-house data and targeted interviews with key players in the C&I heat pump market, we produced a detailed report outlining the future growth of the C&I heat pump market in Ireland and UK. Our analysis also identified the key customer segments that will likely adopt the target’s solution. Competitor analysis helped the client to understand how well positioned the target company was versus the competition. European-level insights were also provided to give the client an indication of potential opportunities for the target company to grow outside UK and Ireland.

Our impact

Our report provided our client with robust information and data that supported discussions with the investment committee – informing its decision to currently hold off proceeding further with investment in the target company.