An infographic showing how Trivium Global's helped a private equity firm conduct due diligence

In this article, I’ll share how we helped a private equity company conduct due diligence. Through this case, I’ll reflect on how we’ve adapted the way we work on projects and communicate with our clients during COVID-19. 

If you tend to recoil at the prospect of seeing yet another COVID-19 related post on your timeline, trust me you are not alone.

But hey, we didn’t choose the COVID-19 life, it chose us. 

This pandemic has thrown many businesses off their guard and financial advisory practices like us haven’t been safe either. 

Our team at Global Trivium has had to adapt its work methodology to keep up with the challenges generated by the changing market dynamics.

The Problem

On the eve of May 3rd, 2020, our CEO received a very frantic call from the managing director of a PE firm. They were trying to negotiate multiple deals in the sports marketing and analytics space, and they needed everything to be done in a matter of weeks. Multiple negotiations with potential co-investors had to take place. All assumptions needed to be vetted. Operating partners in the deal needed to be comfortable with the projections. It was a very demanding task. 

Since the PE firm was grappling with the impact of COVID-19, the director was looking for a strong resource that could assist them in conducting deep-dive due diligence within 4 weeks.

The Sports Industry Overview

Before I elaborate on how we went about solving the case, it’s interesting to see where the sports industry stood at that point.

The economic impact of COVID-19 on US sports has been quite detrimental. 

According to sports marketing agency Two Circles, the sports industry was originally on course to hit US$135.3 billion in total income in 2020, which would have been a 4.9 per cent increase on the US$129 billion generated in 2019. Unfortunately due to COVID-19, the industry has faced a US$61.6bn revenue drop.

Loss of revenue in the sports industry due to the COVID-19 pandemic as of May 2020 - Statista
Loss of revenue in the sports industry due to the COVID-19 pandemic as of May 2020 – Statista

Moreover, analysis suggests a loss of an estimated 2.2 billion U.S. dollars of national TV revenue for the sports industry as a result of the crisis.

The cancellation of postponement of all sporting events in mid-March impacted approximately 1.3 million sports jobs.

Sports occupations lost a total of approximately $12.3 billion in earnings by mid-June. That’s an average of $133.4 million in earnings every day, or $92.6K every minute.

The Trivium Global COVID-19 Modus Operandi

Now it’s no secret that we had our hands full. But, we also knew that we had to get the job done. 

So the first step was to make sure we had our COVID-19 work methodology in order. That meant:

  1. 24-hour coverage – around the clock build-out of financial models, investor memos/decks, and Board presentation materials
  2. Distributed task-force (per shift responsibilities):
    • One model owner
    • 2-3 resources dedicated to information gathering, presentation work and writing

Our team had to adjust to working from home in a short time. So just as we were testing the waters of an unprecedented working environment, a complementary working methodology needs to supplement our efforts.

First things first, we ensured that our communication with both our client and within our teams was top notch. We communicated clear guidelines to all team members. We set ambitious goals and deadlines and were able to deliver on them.  

Our team truly embodied the spirit of entrepreneurial agility that we so proudly claim to be one of our business’s USP. 

The Requirements for conducting Due Diligence

Let’s cut to the chase. Here are the things we needed to do. 

  1. 10 operating models.
  2. A roll-up strategy/model with integrated 3-statements, financing, and a cap table.
  3. Communicating our insights on various decks and investment memos

On top of it, we had a 4 weeks deadline. 

What did we achieve?

This was a very unique ask in a short amount of time, and this is what we achieved.

  1. We assisted a PE portfolio company build out an entire Covid-19 long-range plan; we restructured revenue growth, revenue share contracts, and built this in an integrated fashion with visualizations/analytics to communicate our results to the client.
  2. Built overrides so that the company could present “pre-” or “post-COVID” scenarios seamlessly without altering the core architecture/construction of the model
  3. What does this allow for?
    • Maximum flexibility
    • Advanced scenario planning
    • Proper decision-making on capital allocation

How Trivium Global can help you during this time!

We UNDERSTAND your business. It’s like we are full time employees because we TAKE OWNERSHIP.

Why does the outsourced model work? Because we:

  • invest heavily in attaining a background in the company
  • have a scale
  • develop trust
  • work with you in a sustained partnership.

We’re just a call away.