Flour milling | Technical due diligence for strategic sale

The problem

The client, a significant government player in the Middle East grain industry needed to privatise its considerable milling assets, in line with the government’s national industrial strategy.

The solution

The client retained Farrelly Mitchell to carry out vendor commercial and technical due diligence in the sale of four milling companies, an important venture in the context of the government’s overall industrial strategic vision.

The work comprised detailed reviews of logistics and processing assets across 13 separate sites, including three port locations. Their team also provided a detailed market study with an analysis of the industry landscape, future growth forecasts and various policy scenarios.

In addition, Farrelly Mitchell was engaged to develop capability and evaluation criteria, with each potential bidder / investor from the domestic, regional and global market required to demonstrate their ability to meet both technical and financial qualifications.

The results

This assessment satisfied the need for applicants to possess the technical and commercial abilities to further enhance the Kingdom’s milling capabilities. Parallel with the privatisation process, the client had developed a suite of sector licencing, quality, food safety and operating regulations to govern future operations in the sector.

Farrelly & Mitchell undertook a benchmarking exercise of licencing models and recommended the optimal licencing fee structure for the sector. They also advised on technical and commercial aspects of the Sector Implementing Regulations, including quality regulations for commodities at purchase and outturn.

Additional quality regulations were developed for manufacture standards and end-product quality. The company was highly instrumental in contributing to a successful privatisation process.