This deck was displayed at the MIT Private Equity Symposium April 5, 2013. It gives examples of charts used by private equity professionals to screen acquisition candidates and perform strategic due diligence. Visit this page to download as a PowerPoint file--https://www.mekkographics.com/resources/get-started/presentations/

1. STRATEGIC DUE
DILIGENCE
David Goldstein
President, Mekko Graphics
david@mekkographics.com

2. Introduction
• Mekko Graphics is used by over 75% of the top 25 private equity firms as identified by
Private Equity International
• It plays a critical role in all stages of the strategic due diligence process:
• Market analysis
• Competitive positioning
• Customer analysis
• Company analysis
• Mekko Graphics supports chart types and features that are valuable for due diligence
and not found in PowerPoint or Excel:
• Marimekko chart
• Bar Mekko chart
• Cascade, waterfall or bridge chart
• Data rows, data columns and CAGR columns that align with the chart
• Growth lines and comparison lines
• Mekko Graphics has over 15 years experience satisfying the charting needs of:
• Strategy consultants
• Private equity firms
• Strategy and marketing professionals at Fortune 500 companies 2

3. Market Analysis
3
Use a Marimekko chart to map the market by industry vertical, identifying an
unpenetrated market opportunity.

4. Market Analysis
4
A Marimekko chart can also map the market by company size and industry
vertical

5. Market Analysis
5
Use an area chart with a CAGR column to track market trends over time
0.0
1.0
2.0
3.0
4.0
$5.0B
Other
Medical
Industrial
Machinery
Auto
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
5%
8%
14%
3%
TotalMarketSize($B)
2002-2012
CAGR
4.7%Total

6. Market Analysis
6
Use a 100% stacked bar to identify market opportunities.

7. Competitive Positioning
7
This Marimekko chart presents market share by competitor and industry
vertical. We use a data row to show overall competitor revenue.
0
20
40
60
80
100%
Competitor A
Automotive
Medical
Distribution/Industrial Supplies
Industrial Machinery & Equipment
Electronics
Consumer Goods
Fabricated Metal Products
Hydraulics & Fluid Handling
Appliances & Housewares
Rubber, Paper & Plastic
All Other Industries
Competitor B
Automotive
Medical
Distribution/Industrial Supplies
Industrial Machinery &
Equipment
All Other
Industries
Competitor C
Automotive
Medical
Distribution/Industrial
Supplies
Industrial Machinery &
Equipment
Hydraulics & Fluid
Handling
All Other
Industries
D
Automotive
Medical
All Other
Industries
E All Other Competitors
All Other Industries
PercentofTotal
$800M $400M $300M $200M $50M $500MCompany Revenue

8. Competitive Positioning
8
CountryCurrent Marginal Cost: ~$80
Previous Marginal Cost: ~$50
0
20
40
60
80
$100
Vale SA
Ku
m
ba
Iron
O
reCV
G
F/ON
M
D
C
CSN
Rio Tinto BHPBFortescu
e
M
etalsSa
m
arco
Cleveland
C
liffs
UnitCost
Chile
Canada
Sweden
USA
Brazil
South
Africa
Venezuela
India
Australia
Peru
Mauritania
The Bar Mekko shows competitor cost analysis. We use color coding to
differentiate countries and average lines to highlight key costs.

9. Competitive Positioning
9
The bubble chart contrasts earning, market share and revenue for each competitor.
The competitors in the shaded area are niche players with relatively high earnings.
-20
0
20
40
60%
0.01 0.02 0.05 0.1 0.2 0.5 1 2 5 10
100,000
Competitor 9
Competitor 10
Competitor 16
100,000
Competitor1
Competitor2
Competitor3
Competitor4
Competitor5
Competitor6
Competitor7
Competitor8
Competitor11
Competitor12
A.C.M.E.
Competitor13
Competitor14
Competitor15

10. Customer Analysis
10
This Marimekko chart presents sales by brand and channel. You can spot
opportunities for growing a specific brand in a sales channel.

11. Customer Analysis
11
This Marimekko chart presents sales by customer and region.
0
20
40
60
80
100%
Revenue in $M
South
Customer1
Customer2
Customer3
others
$50,764M
South -East
$20,021M
Mid-West
$42,107M
North/North East
$9,074M
Total =
$121,966M

12. Customer Analysis
12
A Bar Mekko is an effective way of summarizing a company’s overall profitability by
breaking out its components, revenue and contribution margin in this case

13. 0%
50
60
70
80%
0 2 4 6 8 10 12 $14K
Segment
Revenue
Hydraulics
Pneumatic
and Fluid
Handling
Rubber
Paper &
Misc Plastic
Products
Segment
Revenue
Average Account Size ($000s)
CustomerContributionMargin
Automotive
Hardware
Industrial Machinery and Equipment
Medical
Electronics
and Electrical
Sporting Goods, Toys &
Recreational Equipment
Fabricated
Metal Products
Appliances and
Housewares
Air, Land and Water Transportation
Customer Analysis
13
A Bubble chart can be used to overlay two additional dimensions of information
to the overall profitability.
Medical and Air, Land & Water
Transportation segments display outsized
margins vs. what would be expected for
customers of that size
R² = 0.68

14. Customer Analysis
14
Use a cascade chart to track customer gains and losses.
0
10
20
30
40
50
$60M
2011
All Other
Customer1
Customer2
Customer3
Customer4
$49M
Customer Gains
All Other
Customer5
Customer6
Customer7
$14M
Customer Losses
All Other
Customer1
Customer3
Customer8
-$13M
New Product Line
All Other
Customer9
Customer10
$9M
2012
All Other
Customer1
Customer2
Customer3
Customer4
Customer9
$59M

15. Company Analysis
15
Add a growth line and a CAGR column to a stacked bar chart to track sales by
product for the last four years.
0
20,000
40,000
60,000
2009 2010 2011
22,597
2012
CAGR +3%
30,970
19,875
1,539
52,812
33,045
20,186
1,612
55,024
32,813
2,101
57,623
31,151
24,684
2,133
58,067
CAGR +3%
0.2%
7.5%
11.5%
-38.8%
09-12
CAGR
PRODUCT 1
PRODUCT 2
PRODUCT 3
PRODUCT 4

16. 0
20
40
60
80
100%
Percent of Total
Brand 1
Operations
Marketing
Corporate Marketing
Support
Curriculum
Training
Ops Processes
CEO Office
$10,162,964
Brand 2
HQ Operations
Operations
Marketing
Corporate Marketing
Training
Training
CEO Office
$4,608,052
Development
Development
Real
Estate
Sales
Construction
Design
$2,903,704
Human
Resources
Recruiting/
Staffing
Travel/
Aviation
Compensation/
Benefits
Field
Recruiting
OtherAdmin
Services
Management
$2,083,092
Legal
Risk
ManagementLossPreventionContractAdm/Legal
Other
CEO
Assistant
InternationalEquipmentServices
$1,641,224
Finance
Finance
TaxPayrollTreasury
Corporate
AccountingFranchiseeAccounting
Business Analysis
$4,355,556
Information
Technology
Telephony /
Comm /
Web
Technical
Support
HelpDeskSoftwareDevelopment
P&D
ProcurementManagementDistribution
Internati onal
Purchasi ng
/D i stri buti on
MiscQA
$1,325,604
$1,136,232
Information Technology
$2,335,588
Total =
$30,552,016
Company Analysis
16
Use a Marimekko chart to break out costs by department.

17. 0%
40
50
60
70
80
Total Custom
57%
M
edical
84%
79%
75%
69%
54%
Automotive
Total Custom
57%
T
ransportation
Rub
ber/Paper/
Plastic
Products
H
ardw
are
Ind
ustrial
M
achin
ery
Ele
ctro
nics
0%
40
50
60
70
80%
M
edical
70%
Appliances/H
ousew
ares
Electronics/Electrical
Automotive
H
ardw
are
58%
Fab
M
etalProdu
cts
Rubb
er/Paper/
Plastic
Products
Recreational Equipment
IndustrialM
achinery
Company Analysis
17
The profitability of Plant 1 is higher than Plant 2 even though the automotive
segment is weighing it down.
Plant 1
Profitability: 70% Plant 2
Profitability:
62%
ContributionMargin
ContributionMargin
Plant 1 Plant 2
By using two Bar Mekkos side by side, the profitability across two divisions
of a company can be shown while retaining the relative size of each.

18. Company Analysis
18
The decrease in profitability among automotive customers was more than offset by
the increases in industrial machinery, medical, and all others between 2011-2012.

19. Company Analysis
19
You can also use a cascade to estimate the overall change in equity value for
the investment.
0
50
100
150
200
250
300
350
$375
Equity Value Creation ($M)
Equity Value at
Close
PE Firm
Mgmt
$136M
Fees & Expenses
-$14M
Debt Paydown
$108M
EBITDA
Improvement
Market Growth
Share
Gain
Expense
Reduction
$137M
Equity Value at
Exit
PE Firm
Mgmt
$367M

20. Learn More
To learn more about creating persuasive charts, download the free
Mastering Chart Selection Guide, which includes a 30-day trial of the Mekko
Graphics software.
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