Private Equity - Business Expertise

The experience and skills of the key people in the PE firm combined with your company’s in-depth understanding of the business and knowledge of the market is what can take the business to the next level.
The partners and key staff at a modern PE firm can often provide an outside viewpoint, experience and expertise in a wide array of areas such as:

• Information Technology
• Customer relation management systems
• Accounting  and financial expertise
• Acquisitions and post-acquisition integration
• Advise on legal matters
• Patent and intellectual property protection
• Brand management and development
• HR support including organization improvement, incentive programs, and professional development
• Continuous improvement systems
• Business and industry  contacts
• Board governance
• Large company management skills/training
• Outsourcing expertise and supply chain expertise
• International expertise
• Business professionalization
• Strategy development
• Business planning and execution

Overview on How the Private Equity Industry Works

• How the PE Companies Operate
• Types of Deals
• Financial engineering vs operational improvement
• Key criteria for an LBO
• Buy and build strategies
• What to look for in a PE firm
• PE business expertise
• Valuations and conclusions

​What else to look for in a PE firm
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Besides its business expertise and capital, what else should you look for in a PE firm?  One important item is an understanding of how they structure their deals.  What degree of leverage do they use to finance their acquisitions?  You should also look at a PE firm’s track record.  Do they deliver good results and do what they say?  The best way to understand their track record is to talk to people who have dealt with them.  A good PE firm will be anxious for you to talk to references and be pleased to introduce you to other owners that have sold all or part of their businesses to the firm, or managers of current portfolio companies. It is important to understand the PE firm’s core values and their plans for the business post acquisition. How do they plan to incentivize staff, and remaining management including yourself if you stay on?  Will they provide further financing to fund growth plans if management hits its targets?
 
There are lots of advantages to selling your company to a PE firm rather than another industry player – you just have to ask the right questions.

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Valuations and Conclusions