Value creation efforts

professional profile

June 02, 2024

by a professional in London, UK

Hi all,

Given that value creation teams are generally part of larger PE firms, I am curious to know how you go about focusing on value creation efforts for businesses that you buy.

- Do you outsource?
- DIY?
- Engage with the existing team?
- Other

0
9
83
Replies
9
commentor profile
Reply by a searcher
from Tulane University in Phoenix, AZ, USA
This is a good question and agree with Renato. From my point of view, leveraging and paying for outside advisors is only worthwhile if you're anticipated ROI meets your minimum threshold. For many smaller organizations, having the excess cash on hand can also be a hurdle as well.

If you are considering improvements to working capital (receivables, payables, etc.), you may be able to negotiate fee for value contracts that pay out based on realized savings (although this is largely dependent on the size of the business-- smaller organizations are less likely to have the opportunity target large enough to justify such contracts).

Outside of this, engaging with opportunities that are within the wheelhouse of your management team / board will drive incremental value at a more reasonable cost than hiring outside advisors.
commentor profile
Reply by a professional
from INSEAD in Singapore
This is part of what we do at Cruxdata--while I'm in agreement with Renato on the low ROI from powerpoint slides, there is significant value to be created by consultants who actually have skills and implement (and I say this as an ex-MBB consultant myself!). The things we have done in this space focus on getting you/your hired exec team reliable and representative data to run the business by--many build M&A models with baked-in assumptions of improvement in operational drivers but don't have the instrumentation to allow them to activate the business against those drivers after acquisition. In a similar vein, we support with targeted process automations / system and data integrations to remove repetitive, manual work and release staff to focus on higher value tasks. Feel free to drop me a message if this stimulates thoughts
commentor profile
+7 more replies.
Join the discussion