This research presents the use of experimental design, optimization and multivariate techniques to investigate the root-cause of agglomerates containing two drugs [i.e. racecadotril (RCD) and loperamide hydrochloride (LPM)]. The influence of various excipients and processing conditions on formation of directly compressible agglomerates was prepared by crystallo-co-agglomeration (CCA) technique and evaluated. Design of experimental (DoE) was carried out to evaluate the interactions and effects of the design factors on critical quality attributes (CQAs) of agglomerates. The design space was studied by DoE and multivariate analysis to ensure desired physico-chemical properties of agglomerates. The overall higher yield of the process with sufficient size of agglomerates was prepared by CCA. The optimized agglomerates exhibited excellent flowability and crushing strength along with good compressibility and compactibility. The optimized batch of agglomerates was characterized by Fourier transform infrared spectroscopy, differential scanning calorimetry, powder X-ray diffractometry and gas chromatography which illustrated the absence of drug-excipient interaction with minimal entrapment of solvent. It was demonstrated that QbD principles and tools provide an effective means to achieve a greater understanding of agglomerates prepared by CCA which adopted as an excellent alternative to wet granulation. (C) 2013 Elsevier B.V. All rights reserved.