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 and the post-merger integration phase.
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
Argon & Co supports its private equity clients throughout the entire investment lifecycle; from operational due diligence to the implementation of competitiveness plans and PMI. We can help you with:
- Operational due diligence
- Operational process improvement including R&D, procurement, logistics, IT and support functions
- Field services transformation
- Cost reduction and cash optimization