A Year in Review
In 2018 alone, BluWave supported over 700 private equity projects, providing due diligence, value creation, and private equity operations services to our clients. Upon review, we found that private equity funds and their portfolio companies are investing more and more resources in value creation initiatives. Due diligence services remain critical to understanding potential investment targets, but the way they’re done is evolving. As we look back on the previous year, we’d like to reflect on some of the areas where we impacted change and provided key insights. We’ve also taken a look at the categories of due diligence and value creation that held the most potential for our clients.
Due Diligence Needs Remain Acute and are Changing
Whether you’re making an investment in a new platform, doing add-on acquisitions, or researching and developing new product lines, an ounce of prevention is still worth a pound of cure. Last year, about 40% of our support activities were in the Due Diligence arena. Here are some of our top categories by level of activity:
#1: Market Study / Strategy
Know your market opportunity and get your strategy down before you make investments. We saw significant activity with groups looking for pre-established expertise associated with market diligence and strategy firms. Our most proactive customers have been moving away from one-size-fits-all generalists who have to learn the market while doing projects.
#3: Voice of Customer
Your customer will tell you where to go. When a full market study isn’t necessary for pre-acquisition diligence, an increasing number of our clients are looking to conduct voice-of-the-customer studies. This lowers costs and allows for a more customer-focused insights. This is also a must do for significant R&D projects.
#4: Geographic Diligence & Analytics
Who, what, when, WHERE, why. Our private equity fund customers are increasingly moving their value creation planning into the pre-closing phase, so they can confidently understand and execute geographic growth strategies immediately after closing a deal.
#8: Executive Team Assessment
Know thyself. People matter more now than ever before. These days, you have to know if you already have the right team in place or will need to make changes quickly.
#10: Merger Integration Planning
Add-on acquisitions are part of the standard playbook now for most proactive business strategies. Our clients know that pre-merger planning is critical to the success of buy-and-build strategies. You can’t do everything at once without adding resources. Don’t tax your full-time staff to get it done semi-right: rent some experts to show you the way.
Value Creation Matters More Now than Ever Before
At BluWave, we’re experts at helping clients win by using proven resources to execute accelerated value creation. Staying the course can no longer be the solution — you need to fly over and around your corners. As such, more than half of our time in 2018 was dedicated to helping our clients win the race after investments were made. Below are some of the top 10 value creation categories we supported clients with in 2018. Contact us for the full deck of BluWave’s 2018 Insights including more of our value creation insights.
#2: Executive & Staff Recruiters
You shouldn’t hire a real estate agent from Manhattan to buy a house in Nashville. Most BluWave clients have learned the perils of the bulge bracket recruiting machines. Our clients very regularly came to us in 2018 to connect them with private equity-grade recruiters who specifically know their markets and functional areas and aren’t encumbered by politics or no-call lists.
#4: Digital Marketing Demand Generation
Use this thing called the Internet to regularly reach 1,000s at the click of a button. Leading B2B companies are figuring out what B2C companies already know – that digital marketing can be a huge driver of demand and growth. BluWave’s clients are adopting digital marketing strategies in large numbers.
#6: Procurement and Sourcing
Why are you leaving free money on the table? Most portfolio companies have a lot of unmined money in their P&L. Our clients are using GPOs, indirect and direct spend reductions groups to drive savings and add multiples of enterprise value at exit.
#9: Pricing Strategy
Raise the tide to lift your boat. As we’ve all learned, intelligently raising prices is one of the best ways to increase profits. There is both an art and a science to this. Our clients regularly turned to us to connect with the best experts to help them get optimal results.
Insights to help you win
Whether you’re conducting due diligence or building value, you owe it to your company to get it right the first time and you shouldn’t have to use your scarce and valuable time entering queries in a search engine or calling friends to find an untested solution. More than 225 private equity funds and their portfolio company leadership teams turn to BluWave to support their success. To learn more about how BluWave can help grow your business or to receive our BluWave 2018 Insights deck, contact us today via the form below. Our industry experts and professional network will help you achieve your business goals in no time.
