Operations transformation is a significant opportunity for investment funds to create value in their acquisitions when following a buy and build strategy. There are three stages that are critical to investors:
- The operational due diligence phase
- The implementation of transformation plans of portfolio companies
- The post-merger integration phase
Challenges in the private equity industry
The operational due diligence phase must highlight key risks and opportunities of the current situation and of the business plan. Characterized by limited access to time and data, this step requires a high level of expertise to identify and assess risks.
The next step is to ensure operations are managed effectively to maintain continuity during the closing phase. The identified levers for business improvement in the due diligence phase need to be studied in detail and implemented on the ground in collaboration with operational teams. These include cash optimization, cost reduction plans, support function reorganization, service level improvement, and adaptation of operations to support growth ambitions, amongst others.
Bringing in expertise in operations speeds-up the integration of operational teams, leaving the development of initiatives to the current management.
In build-up situations, Post-merger integration (PMI) phases should define and implement a targeted organization structure, identify synergies and build a strategy to integrate the transformation on the ground.
How we can help the private equity industry
We support our private equity clients throughout the entire investment lifecycle; from operational due diligence to the implementation of competitiveness plans and PMI. For example:
- Operational due diligence
- Operational process improvement including R&D, procurement, logistics, IT and support functions
- Field services transformation
- Cost reduction and cash optimization
We apply a combination of technical expertise, operational experience and business knowledge to help our clients solve private equity issues and deliver lasting results. Our personal and pragmatic approach, with challenge where needed, ensures buy-in at all levels of our clients’ businesses and a successful outcome. We have worked with a wide range of organizations in the private equity industry including Abénex, TZP Group, OpCapita, Elysian Capital, Partech, Sun Capital Partners, LGT Group, Exor, Cinven and KKR & Co. Learn more about us here.