Understanding Opportunities for Market Growth and Defining a Selection Criteria for M&A for a Brazil-based Company
BTG Pactual, a leading investment bank in Brazil, tasked the Capstone team with charting a growth strategy for CCRR, a company partly owned by BTG’s private equity arm. As part of its growth strategy, CCRR, a leading Brazilian company dealing in adhesives, labels and specialty paper in Latin America, recently began to expand its service offerings into RFID technology solutions, with a focus in the retail sector. BTG Pactual, in an effort to better understand the RFID technology and, more importantly, be convinced of its commercial viability for the Brazilian market, sought our analysis of the technology, and a means of quantifying its potential return on investment (ROI) to CCRR clients.
Additionally, BTG Pactual asked that we analyze other potential strategic growth options for CCRR given current trends in the global market. Specifically, the team evaluated the following questions for the client:
- Is RFID the technology of the future?
- Is a one-stop shop business model the best approach?
- How can operating margins be improved?
After extensive research, field study and analysis, the final report reached the following conclusions:
- RFID is indeed the technology of the future, as global trends suggest that RFID is the next natural phase in the growth trajectory for leading firms in the paper and printing industry.
- The one-stop shop approach is also consistent with current industry trends globally and offers opportunity for economies of scale across the RFID value chain.
- Finally, the one-stop shop model would contribute to improved operating margins by bringing more of the value chain in-house.