Beyond Checking the Due Diligence Box
Satori Capital is a private equity firm founded by entrepreneurs based in Dallas, TX. With the acquisition of Purple Land Management on the horizon, it was an opportune time to find a new consulting firm to assist in market studies. Satori principal, Rugger Burke, was a classmate of Mark Hess in the Stagen year-long Integral Leadership Program. Maven Associates appeared to be a good fit for the type of market studies Satori envisioned.
Purple Land Management provides professional services to oil and gas companies throughout North America. The core of the services involves assisting in the acquisition of mineral rights.
Acquisition due diligence has evolved rapidly in the last decade. In the past, it was sufficient to evaluate the quality of earnings, legal and environmental risks and interview a few customers. As the private equity market has become more competitive, the risks have increased and lenders, investors, and insurance companies are requiring the scope of a due diligence effort to expand to include a more strategic view of the target. Maven was well-positioned to offer a strategic view of Purple Land Management to Satori.
This project was unique in that the land management services market is a niche market that does not have a lot of industry data. This is where Maven’s expertise is showcased. In the absence of existing market research reports, Maven is able to leverage a variety of data sources to develop a point of view. For Purple Land Management, Maven was able to size the market by estimating the number of landmen in the industry (via LinkedIn and other sources) and then estimate the size of the market knowing the average revenue generated by each landman. The calculation was compared to a small industry report and against what was learned in customer and industry expert interviews.
At the completion, Satori closed on the deal and has since engaged with Maven on four other due diligence projects. Maven’s ability to deliver beyond checking a box, and providing insights from limited data in a short period of time gives clients the confidence to move quickly in the right direction.