Bridging Strenght: a case study on M&A and vertical integration between a structural reinforcement firm and its supplier

This case study examines the strategic and financial implications of G&P Intech’s proposed vertical integration with its supplier, Azichem, within the construction chemicals industry. With a focus on seismic reinforcement, the study highlights the impact of geographical earthquake risks on market demand, particularly in Italy. Through valuation methodologies such as discounted cash flow (DCF) and relative valuation, the financial feasibility of the acquisition is assessed, emphasizing synergies in procurement, research and development (R&D), and market expansion. Additionally, the study explores deal structuring, financing options, and post-acquisition liquidity management to ensure financial stability. While the acquisition presents significant benefits, including supply chain optimization and technological advancements, potential risks such as regulatory challenges and integration complexities are also considered. Ultimately, the case study concludes that acquiring Azichem would enable G&P Intech to strengthen its market position, enhance resilience, and drive long-term value creation through strategic vertical integration.