Value Creation Services

Comparator Benchmarking

Our comparator benchmarking services provide transparency of the value upside potential and valuation impact across a target’s Revenue, EBITDA and Net Working Capital. Such outside-in analysis provides early input into your existing diligence areas to help drive transparency and prioritisation of specific focus areas and deep dives. We provide specific performance valuation approaches which sum up the overall value potential and valuation impact.

Our Value Creation Services team assists with:

• Performing comparator analysis across EBITDA, Revenue CAGR and Net Working Capital to quantify the P&L and cash release potential
• Quantifying valuation impact based on the EBITDA upside potential of the business and forward-looking comparator transaction multiples
• Specifying hypothesis areas that show indicative opportunities to unlock the value and an overview of potential next steps

Buy-side Synergy Assessment

As corporations and private equity firms consider mergers and acquisitions that will combine operations, they generally rely on high-level, top-down assumptions to identify synergies that are built into valuations. These same organisations are often surprised when assumed post-deal operational improvements aren’t as significant as planned or take longer than expected to realise.

We help our clients with a bottom-up approach that puts management’s skin in the game early on to identify where specific top-line synergies shall be achieved and where cost reductions may be achieved. Such diligence can help justify valuations and drive early alignment around the new operating model for the combined business.

Our Value Creation Services team assists with:

• Creating consistent cost and functional baselines that maps the cost pools from the combined P&L to specific functional areas such as finance, HR, and marketing
• Segmenting and prioritising synergy opportunities through initial hypotheses about synergies identified through buyer engagement
• Quantifying specific synergy opportunities and cost-to-achieve by functional area
• Developing new financial model and explain variances from initial assumptions
• Creating a synergy-capture blueprint and integration road map

Sell-side Vendor Showcase

An experienced buyer will require significant substantiation and evidence that the performance of the business is sustainable, and that incremental opportunities exist to create value both standalone and through synergies.

Our sell-side value showcase approach provides a robust substantiation of the granularity, evidence and sustained value potential of existing or identified opportunities.

There are five key areas that can help unlock the exit valuation potential: the key success factor is to ensure that these are practical with substantiated evidence, and where possible already in progress with financial results.

Our Value Creation Services team assists with:

• Establishing addressable cost areas​, by leveraging external comparator benchmarks and data points to identify EBITDA and NWC upside potential​
• Defining competitive affordability​ that needs to be achieved to reach targeted valuation upside​
• Quantifying gap from current performance to establish improvement targets by cost area​
• Identifying operational levers by cost area, by showcasing the issue and quantification of the value upside range for each initiative​
• Prioritising initiatives based on implementation timeline and allocation into groups: immediate execution​, granular planning​ and strategic shifts

Commercial due diligence

We support corporate clients and private equity firms in performing successful deals through unlocking valuable industry and company insights to validate the investment thesis and identify acquisition targets’ true value and potential performance through commercial due diligence.
Our commercial due diligence provides you with deep insights into revenue and growth projections, industry dynamics and outlook, legislations and value creation opportunities required for making the right strategic decisions.

Our Value Creation Services team assists with:

• Producing a concise report designed for Investment / Credit committees
• Delivering within a timetable set to synchronize with transaction cycle
• Applying a bias towards primary research based on studies and interviews
• Assessing competitor information through multiple sources
• Conducting a full study vs 'tailored' study: our work can be organized into discrete parts
• Leveraging our broad internal network to unlock valuable industry insights

Operational due diligence

Our corporate and private equity clients are ever more often looking to increase transaction value through improving operational performance and proactively managing operational risks.

In acquisitions undertaken by corporate clients, value is typically realised in the form of synergies, and in divestment processes from capturing and communicating an effective value enhancement proposition for the entity being divested.

For private equity investors, operational efficiencies and cost reduction continue to be a focus area, both during the acquisition due diligence as well as post completion.
Our dedicated Operational Due Diligence (ODD) team comprises experienced line managers and operational due diligence specialists with operational restructuring and performance improvement expertise. This cumulative expertise enables us to deliver comprehensive insights into operational risk as well as potential opportunities in both pre-deal due diligence and post-deal value capture and enhancement.

Our Value Creation Services team assists with:

• Developing an understanding of the composition and nature of the target company’s cost base and operational capability, including areas of IT
• Reviewing and evaluating forecast cost reduction plans, including restructuring plans, synergy reviews and bid defence plans
• Reviewing and evaluating operational risks within a business
• Identifying opportunities for further cost reduction and assisting in the development of performance improvement and value capture plans

Private Equity Lens

Our long-standing Private Equity (PE) relationships and strong track record are predicated on deploying proven PE techniques and tools to rapidly identify, quantify and deliver value across the entire value chain. Deployment of our approach means that we are sharply focused on driving results that unlock cash and enhance profits. Our Value Creation Services are also tailored to the type of situation at hand, such as acquisitions, divestments, transformations, or turnarounds.

Our Value Creation Services team assists with:

• Leveraging external comparator benchmarks to provide unconstrained challenge
• Engaging management early to fact-find and challenge opportunity hypotheses
• Establishing tangible insights and analysis to identify practical levers with buy-in
• Providing value upside estimates early in process to set the ambition & pace
• Ensuring all benefits and impacts can be reconciled and reflected in operational P&L
• Operating under a rapid timeline from baseline setup to quantified value levers

Working Capital Diagnostics

We work with clients across the spectrum from healthy to distressed situations when there is a specific trigger for cash resulting from the need to finance organic growth, key projects and/or acquisitions. We support our clients over the whole of their cash agenda from the initial identification of an opportunity through to supporting in cash release and ensuring that improvements are sustainable.

In our experience, driving sustainable working capital performance improvement (OTC, PTP, FTF) requires the deployment of a ‘cash mindset’ throughout organisation, often after a period of focus on growing revenue and margin at the expense of cash.

We help our clients to instil this cash mindset across their organisations and to manage the trade-offs inherent in an agenda covering cash, revenue and profitability in a constructive, collaborative and co-ordinated manner.

Our Value Creation Services team assists with:

• Identifying outside-in risks & cash opportunities to assess the materiality and short-list areas for further analysis
• Working with senior management in achieving sustainable receivables, payables and inventory reductions across all geographies and all industry sectors
• Providing our clients with insight into specific drivers of working capital performance and the impact of country payment cultures
• Supporting the introduction of leading practices to support sustainable performance improvement

Value Capture and Tracking

No matter how substantiated your value upside or synergy plan is if your organisation doesn’t translate them into real-life benefits by executing on the underlying improvement levers and integration initiatives. We can help you and your organisation define key implementation targets and milestones and then consistently challenge their progress in a robust and consistent manner, while monitoring associated risks and reporting out status to key stakeholders.

Our Value Creation Services team assists with:

• Supporting your organisation define financial and non-financial implementation milestones and impacts
• Challenging workstreams to accelerate delivery while driving down implementation costs
• Providing rigorous tracking of improvement upside, synergies and costs
• Providing a single version of “truth”
• Linking in with financial reporting processes and your finance team
• Tracking interdependencies across initiatives as well as adjacent projects
• Monitoring implementation risks and helping define mitigation strategies

Stranded Costs Reduction

Costs that are not direct and incremental to a divested business are considered stranded. We help our clients establish practical plans to re-classify, reduce and eliminate these stranded costs, during or post divestiture.

Our approach identifies, quantifies and challenges stranded cost drivers in order to define tangible levers, enabling you to eliminate or reduce run-rate cost inefficiencies related to your divesture. Supporting you throughout the process, we can also help your organisation in implementing the required changes as well as tracking the benefit realisation against defined targets.

Having supported our clients in numerous transactions, our approach ensures that operational and business continuity are preserved for both the parent company and the divested entity.

Our Value Creation Services team assists with:

• Defining the stranded cost baseline and breaking it down into addressable value drivers
• Identifying the operational levers and requirements to reduce and eliminate stranded cost risks
• Establishing a practical plan to deliver on stranded cost mitigation and accelerate projected cost reduction
• Tracking re-allocations and OPEX reduction in an efficient and transparent manner
• Monitoring implementation risks and helping define mitigation strategies