The Non-Binding Offer is where most operational value gets left on the table. Not because the bidder cannot see the upside — but because at NBO stage there is no full data room, no agreed scope, and no time. So the bid gets built on the Information Memorandum, the management presentation, and a financial model that quietly assumes the tech stack and operational footprint will look much the same after close as they do today.
That assumption is where the value gap opens up — and where competitive bidders win deals at prices the rest of the field cannot justify.
What an NBO diligence is — and isn't
Full operational due diligence happens later: post-LOI, in exclusivity, with deep data room access and weeks of work. That is not what we are talking about here. An NBO diligence is a focused, two-week exercise scoped to a single question:
What is the value potential locked inside this asset's tech stack and operational footprint — and how confidently can we underwrite it in the bid?
The output is not a risk register. The output is a draft 100-day plan and a confidence band on the operational upside. It sits in the IC paper next to the financial model. It changes the bid.
What you ask for, what you get back
Even at NBO stage, a tightly scoped data request typically delivers enough to do real work:
- High-level system architecture and IT/OT topology
- Energy bills, grid connection capacity, and the last two years of utility costs
- Key vendor contracts, software licences, and any in-place TSAs
- The operational org chart and the parent-company dependencies inside it
- CapEx and OpEx footprint, with detail on the last two cycles of capital spend
Combined with two or three management interviews and a site visit where it can be arranged, this is enough to build:
- A short-list of operational levers ranked by EBITDA impact and execution feasibility
- A draft 100-day plan with named workstreams and a rough capital ask
- A view on what belongs in a credible value creation plan — and what is wishful thinking dressed up as upside
- A confidence band on the operational EBITDA bridge the IM is implying
Why this changes the bid
Two outcomes, both useful.
If the operational upside is real and executable, you can bid with conviction. You know what the 100-day plan looks like. You know which levers actually move the EBITDA bridge and which depend on assumptions you cannot defend. You can outprice bidders who are pricing the asset as-is — because you are pricing what you will turn it into. The bid goes up; so does the certainty that the value is recoverable.
If the operational upside is thinner than the IM implies — the tech stack is more fragile than the management deck suggests, the carve-out is harder than the seller has scoped, the grid constraint is a hard ceiling on the expansion thesis — you find this out before you have committed legal and DD spend in exclusivity. You bid down with a sharper rationale, or you walk away early at a fraction of the cost.
The advantage most bidders skip
Most NBO bids are built on the IM and the financial model. The bidders that win competitive processes at fair prices — rather than overpaying or losing on price — are doing operational work this early. Not full DD. Just enough to know what they are bidding on, what they will execute in the first 100 days, and where the value actually sits inside the tech stack.
The bid is more confident because the buyer is. That is the difference between winning a deal and winning a good deal.
If you have an NBO going out in the next six weeks and want a sharper view of the operational upside before you bid, get in touch.