It’s no secret that private equity is facing challenges like never before. The credit crunch has made it impossible to sell portfolio companies, and the era of financial engineering has waned. Lending is at a virtual standstill, leaving you without the funding to improve portfolio companies and execute new deals.
The solution: a renewed focus on operations. Operating for value and rationalizing operations across portfolio companies is the only way to get the internal rate of return you’re looking for. You must adopt aggressive strategies and tactics to weather the storm.
Due Diligence
From “one-day” answers to comprehensive commercial due diligence, our business operations and financial expertise help you make investment decisions with confidence.
Our “one-day“ approach is designed to aid with evaluation of deal flow, to filter incoming opportunities, to identify key issues for potential commercial review and to support a preliminary decision on whether to continue the process. We focus on providing a preliminary assessment, including evaluation of market and company attractiveness based on internal experience and external sources, the transaction’s attractiveness and a qualitative point of view developed through expert interviews.
A comprehensive commercial due diligence is constructed to help you identify threats and opportunities, and to decide whether the business is viable. We provide an exhaustive review of market attractiveness, competitive landscape, customer perspective and financial performance. Additionally, we provide an exhaustive assessment of the target’s business plan, its improvement potential, enterprise value and potential exit scenarios. Our desk research is supplemented by key interviews with industry players and other experts.
First 100 Days
Even though all businesses are different, we’ve learned that most turnarounds have a lot in common, regardless of industry. Over the past 28 years, we’ve developed a battle-tested approach to achieving rapid performance improvement.
This approach, called QuickStrikeSM, can be used in a variety of situations, including:
- Unrealized synergies in rollups and mergers
- Highly leveraged companies straining to meet debt obligations
- Companies in industries that have undergone significant structural changes
- Major erosions in sales levels and/or margins
- Divisions/subsidiaries that are cash drains on their parent companies
With QuickStrikeSM we leverage the valuable work and knowledge that already exists in the portfolio company and combine it with rigorous analytics. We create buy-in with your managers and employees by jointly developing recommendations with those who will be charged with implementing them, and above all, we find and elevate practical solutions.
We believe you can analyze anything in six weeks, but if you can’t implement it in eighteen months, it can’t be implemented at all. Fast is better than perfect and sometimes, a cookie cutter isn’t such a bad tool. At AlixPartners, we partner with you and your managers to deliver fast results.
Full Potential Program
Imagine our QuickStrikeSM program on steroids, and you get an idea of how we use a similar approach – practical, results-focused and collaborative – to expand improvement across the spectrum of the business, including financial, operational, organizational and strategic opportunities.
Based on our deep experience in guiding clients through full implementation, we are well positioned to evaluate what can work and what probably won’t. This insight is invaluable in setting priorities against the basic metrics of difficulty to implement and value creation.
Post Merger Integration
We’ve identified four major reasons that post merger integration fails and they’re centered on loss of focus in four key areas.
- Customers losing accounts after a change in branding or key account management
- The integration team lacks motivation after a lack of success stories or planned synergies are not captured
- Delays foster more delays after a failure to send early signals of a culture of decisiveness and action
- A low number of pre-merger appointments generate insecurity and fear, and organizational design doesn‘t reflect aspirations and needs of key people
We help our clients overcome the odds by defying conventional wisdom about PMI. Our approach teams the right people to address key business issues and to focus on EBITDA rather than synergies. It’s an approach that has worked in add-ons, roll-ups and carve outs.
Exit Value
AlixPartners is experienced in helping PE firms and industrial companies maximize the selling price. Our capabilities include:
- Assistance in “dressing the bride”
- Implement short-term balance sheet and P&L improvement opportunities
- Initiate short-term sales-up programs
- Support in identifying potential buyers
- Systematic search
- Leverage AlixPartners network of referral sources
- Analysis and qualitative understanding of the business helps you develop the acquisition rationale
- Develop exit story
- Calculate synergy potential for strategic investors
- Support management presentations in selling process