How we did it: Immediate senior advisor with niche pharmacy expertise

A PE fund came to us with a critical need for a senior advisor for their healthcare services pharmacy company. Having recently acquired the company and already struggling with direct specialty contracts, they urgently needed someone to help on the payor side. They were looking for a local resource with expertise in pharmacy contracting that could guide them through the necessary certification and contracting process within 2 to 4 weeks. We quickly worked to understand the key criteria of their need and then leveraged our data and human ingenuity to match them with two select pre-vetted healthcare services senior advisors from our invitation-only Intelligent Network. The client selected their ideal choice and the PE fund was able to confidently drive an excellent outcome without wasting time or cost and the portfolio company was able to quickly gain the help they needed in order to get their specialty contracts in place

Read the full case study.

We have a deep bench of senior advisors with a wide array of industry experience and skillsets. We would be happy to quickly connect you with the exact-fit senior advisor or any other service provider you need. Contact us here and our team will begin helping you within 24 hours.

Women in PE Event Recap

Every quarter we gather leading women in PE to discuss current industry topics and to offer intelligent women the chance to gather, share information, and decompress with one another. In our most recent event, we discussed many topics and have listed our top takeaways below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow leading PE professionals during our next Women in PE Forum? Please contact us at events@bluwave.net.

Managing Limited Resources

  • Everyone is trying to manage with limited resources—too few people internally to address unprecedented deal flow, budgets to support the multiple initiatives, and accessing and deploying third parties.  Our panel shared that prioritization and communication are crucial—ensuring, for example, that everyone on a meeting invite is necessary.  To prevent burnout and retain team members, ensure everyone gets a break; as we all know, Zoom fatigue is real.  Some firms are deploying thoughtful staffing systems via CRM and Talent Officers to ensure that objectivity is being applied to staffing for deals.   

COVID Protocol Across Portfolio Companies

  • COVID has also presented challenges in divining unified COVID protocol across portfolio companies.  Our panel and attendees shared that one rigid approach is unrealistic—you can start with a common set of guidelines, but be open and flexible to accommodate differences in size, geography, and comfort levels.  Give employees visibility as to the plan and be prepared to pivot as circumstances change.   

Remotely Onboarding Platform Executives

  • Many firms in attendance had acquired new platforms and have onboarded execs for these platforms remotely.  How to best do this?  Many firms have used cognitive assessments not only for their traditional use but also to adjust onboarding plans to best suit individuals—extroverts with more “face-to-face” meetings, and introverts with more self-guided work.  Many have programmed in true socialization time, so execs can interact one-on-one with at least their direct reports and have small group gatherings with other relevant cohorts.  Some firms have also arranged introductions with execs in similar roles at other portcos to facilitate Q&A that execs may not feel comfortable asking the fund directly at the outset of their tenure. 

We thoroughly enjoyed getting to gather with other leading women in PE to discuss these current industry hot topics.  Here at BluWave, we are specialized to quickly connect you with the exact-fit, pre-vetted, PE-grade service providers you need exactly when you need them.

Never worked with us before? Check out our How To Vet BluWave video to learn more about us and how we can help. And if you have an immediate need, contact us here and we will be happy to help you right away.

An Interview with Great Range Capital’s Ryan Sprott

Ryan Sprott and Paul Maxwell aren’t your typical brothers-in-law. Instead of solely cavorting during family vacations, holiday meals, and the occasional couples trips, they went all in and founded a company together. After working in New York’s private equity industry for nearly two decades, the two entrepreneurs moved their families back to Kansas City to launch Great Range Capital in 2010. Their mission: to serve the neglected but vital demographic of Heartland family- and founder-owned companies. In 2011, they signed their first deal. 

“We have a unique combination of institutional-grade experience and Midwest values—basics we learned from our parents, teachers, and coaches,” says Sprott. “We see our investments as long-term partnerships with people who share these values, are community-oriented, and whose businesses are integral job-creators in the cities and regions where they operate.” 

In other words, Great Range Capital is fueling the classic American Dream writ large. I sat down with Sprott to get his take on the Midwestern difference, the challenges of due diligence, and what excites him most about investing in oft-overlooked Heartland companies. 

Sean Mooney: What is your investment thesis and main area of focus in terms of investment types?

Ryan Sprott: We are mainly focused on buying family companies, typically 3M to 15M in EBITDA, that have never been through an acquisition. We usually look for companies and sellers that value intangibles like a deep desire to embrace culture or family legacy, do right by the small town, and maintain the loyal customer base. In other words, Great Range can bring institutional PE and operating experience, but we’re always looking at the people behind the companies—the ones who make those companies exceptional—not just the market opportunity.  

In terms of investment types, we cast a wide net. But due to our geographic location, we are well-positioned to pursue deals in manufacturing, transportation, business and industrial services, food and beverage, and essential consumer goods. 

SM: What is the most challenging aspect of the due diligence process when vetting a potential purchase?

RS: Validating the people is always the hardest part because it’s difficult to really understand someone’s motivation, capabilities, and modus operandi through limited interaction or merely through references. It’s often hard to know if someone has high integrity until you really get to know them and spend significant time with them and their teams. And there are certainly challenges to predicting if or how someone will change once they have money in their pocket. Gratefully, for the deals we do in the lower to middle market, we have more time to get to know the founders prior to investing.  

Additionally, because we aren’t looking at deals where a wealth of industry analyses exist, understanding the market dynamics, opportunities, and threats, poses another challenge. This is when we call BluWave. You help us find experts who can do a deep dive and develop a plan to execute afterward. Whenever we hit a roadblock and can’t figure out a solution, BluWave is often our first line of defense—not only for diligence, but also for IT, implementation plans, finding great industry executives, and connecting with specific industry resources.   

SM: Is there one overriding success story (in terms of one of your investments) since the inception of Great Range Capital? If so, what did that look like?

RS: True to our Midwest focus, our biggest “win” to date is the aptly named HeartLand, a commercial landscaping company that did its first acquisition in Kansas City. Like most of our success stories, having great people is the key. HeartLand continues to be led by great executives who are passionate about the industry, have a vision for the business, and are committed to doing things the right way.   

Through the course of our ownership, we did a total of nine acquisitions and partnered with outstanding leaders who were laser-focused on culture and exemplary customer service. We invested heavily in business development early on. This led to high organic growth and enabled HeartLand to create tremendous value very quickly. People are central to the success of any services-based business, so in prioritizing that aspect and building on HeartLand’s solid reputation, the returns were outsized.  

SM: What are some of the key characteristics of Midwest companies versus other parts of the country?

RS: While the business models themselves don’t vary from the coasts, per se, the core characteristics of the businesses can be different. Broadly speaking, the Midwest values of loyalty, transparency, and hard work ring true. There isn’t a lot of “fluff.” Company owners have a tendency to focus intensely on their people—both internally (employees) and externally (customers). We notice that most of these founders are looking to find the win-win, rather than win-lose. They want their families and communities to benefit from their success. A majority of the time the companies we invest in are integral job creators in their cities and towns, so it feels more like a “rising tide lifts all ships” scenario than “winner takes all.” 

SM: You’ve said that private equity is a core part of fueling the American entrepreneurial dream. What do you mean by that?

RS: Many of GRC’s portfolio companies were bootstrapped through sheer grit and their knowledge of a very specific industry, product, or service. Sometimes as companies get larger they stop taking the risks that fueled their growth, their leaders get consumed by the relentless daily demands of running a company, or they get comfortable with the income being “good enough.” But when private equity investors come into the picture and provide capital and strategic support, the leaders can once again focus on taking risks and innovating—partly due to the liquidity provided to the owners who may have had most of their wealth tied up in the business.  As a PE fund, we’re investing in new territories, new people, and new channels. All of these investments ideally lead to higher growth, more jobs, and more equity for everyone.   

SM: In your opinion, what makes a great leader?

RS: I’m a big fan of leadership by example—treating people fairly, communicating openly, and being willing to do the hard work and roll up your sleeves. That’s probably table stakes for a high-growth company. But someone who can set a clear vision for where a company should go and then execute on it while getting everyone to buy in—that’s the sign of an excellent leader.   

SM: Ok, I have one last, very important question: Is the BBQ in Kansas City really that good?

RS: Transparently, loyally, and no BS (because that’s how we do things around here) … YES. It really is! 

August 2021 Roundup: BluWave Client Insights

BluWave works with over 500 PE funds from around the globe, connecting them with pre-vetted, best-in-class, interim executives and specialist groups across a variety of resource and functional areas. From information technology and manufacturing to healthcare and consumer goods, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news you can use.

Check out the latest, curated collection of reports, insights, and musings from a handful of our PE funds.

Recently on their blog, Heartwood Partners shared four key priorities from their integration playbook that allow them to ensure strategic add-on acquisitions within their portfolio result in a, “..whole greater than the sum of its parts”. By handling integrations through a tailored approach focused on strategic alignment, communication, collaborative planning, and integration competency, Heartwood claims that strategic and financial rewards of growth can be realized.

Read more >>>

As a guest on 51 Labs’ podcast, Investors & Operators, MiddleGround Capital’s Lauren Mulholland shared how transparency, team building, and improvements to their training process have been instrumental to MiddleGround’s success. She also spoke on a key initiative she has spearheaded at the firm aimed at engaging women of the firm through topics like mental health and building confidence.

Read more >>>

 

Bill Frist, Special Partner at Cressey & Company recently authored a multi-part series that explores the critical role that quality measurement will play in dentistry and oral health in the near future. In this three-part series, Frist examines why dental quality measurement has historically lagged behind other health sectors and how one company is establishing itself as a leader in the dental quality field.

Read more >>>

In a recent Buyouts article, Bryan Taylor, Managing Partner at Advent International, spoke to the growing strength of technology in today’s world and how it permeates everything we do. Taylor remarked that private equity investments in tech will only continue to grow, bringing in new capital, new players, and brisker fundraising.

Read more >>>

You can find last month’s roundup here.

How we did it: Critical VoC Provider

An investment principal at a PE fund came to us with a critical need for Voice of Customer research on a target they had an LOI on in the staffing and recruiting industry. Expecting to get full exclusivity on the target in the next two weeks, they were urgently seeking someone who would quickly be able to perform primary and secondary research on the staffing industry in order to gauge its scope, size, and key players. They were specifically looking for a firm that could go to staffing firms and potential new clients to gather the research, and then synthesize it into usable insights. We quickly worked to understand the key criteria of their need and then leveraged our data and human ingenuity to match them with two select pre-vetted VoC providers. The client selected their ideal choice and were able to gain the customer insights they needed without wasting time or cost.

Read the full case study.

Have a VoC, other diligence, or even value creation need we can help with? Contact us here and our team will begin helping you within 24 hours.

Senior advisor with pharmacy expertise immediately needed

Senior advisor vitally needed for healthcare services portco

A PE firm came to us with a critical need for a senior advisor for their healthcare services pharmacy company. Having recently acquired the company and already struggling with direct specialty contracts, they urgently needed someone to help on the payor side. They were looking for a local resource with expertise in pharmacy contracting that could guide them through the necessary certification and contracting process within 2 to 4 weeks.

BluWave identifies top senior advisor matching specific criteria

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade senior advisor needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of senior advisors that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with select pre-vetted healthcare services senior advisors from our invitation-only Intelligent Network that had the deep pharmacy and payor expertise they needed.

Engaging the ideal provider, the portco gained the help they needed

Quickly after the initial scoping call, the PE firm and portfolio company were introduced to two PE-grade senior advisors that specialized in healthcare services. The client selected their ideal choice. The PE firm was able to confidently drive an excellent outcome without wasting time or cost and the portfolio company was able to quickly gain the help they needed in order to get their specialty contracts in place.

Voice of Customer provider critically needed

Voice of Customer research critically needed

An investment principal at a PE firm came to us with a critical need for Voice of Customer research on a target they had an LOI on in the staffing and recruiting industry. Expecting to get full exclusivity on the target in the next two weeks, they were urgently seeking someone who would quickly be able to perform primary and secondary research on the staffing industry in order to gauge its scope, size, and key players. They were specifically looking for a firm that could go to staffing firms and potential new clients to gather the research, and then synthesize it into usable insights.

BluWave identifies select providers to fit exact needs

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade Voice of Customer needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of VoC providers that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria and then connected the client with two select pre-vetted VoC providers from our invitation-only Intelligent Network that fit their exact needs.

Firm engages top VoC firm for essential insight on target

Within 48 hours of the initial scoping call, the PE firm was introduced to two VoC firms that exactly matched all of their key criteria. The client selected their ideal choice. The PE firm was able to gain the customer insights they needed by engaging with the selected VoC firm and were ultimately able to gauge the relationships and satisfaction level between the target company and their current clients without wasting time or cost.

How BluWave helps PE shrink the world

This month, BluWave founder & CEO, Sean Mooney, had the opportunity to join Devin Matthews on ParkerGale’s Funcast podcast to discuss how BluWave helps PE shrink the world by connecting funds to the exact-fit resources they need when they need them. Sean and Devin discussed how BluWave was born out of a pain Sean experienced during his 20 years in private equity and is made to connect funds to the resources they need when they don’t know who to use or their go-to providers are sold out. They also went into detail on the types of service providers BluWave invites into their network: specialists, spin outs, and independents that have specific capabilities they have provided to past PE firms in niche industries.  

Other topics you can hear discussed in the podcast include how PE is evolving as well as how COVID has accelerated the digital transformation. 

Interested in listening to the whole podcast yourself? Click below. 

How we did it: Immediate strategy session facilitator

A PE fund principal came to us with an immediate need for a strategy session facilitator for their software portfolio company. Having recently acquired the business, the fund wanted to quickly get the portco into strategy sessions so that they could start defining long-term goals. Needing structure for these sessions, they were looking for a facilitator that was a former executive or management consultant and had software industry experience. They immediately needed someone to remotely lead the session and help the portco form and prioritize goals. We promptly worked to understand the nuances of their need and then leveraged our data and human ingenuity to match them with two select strategy session facilitators. The client selected their ideal choice and was so pleased that they have continued to use this resource across their entire portfolio.

Read the full case study.

Have a strategy need we can help with? Contact us here.

How we did it: LMM VP with critical need for ERP selection advisor

A PE fund came to us with a critical need for an ERP selection consultant for their portco in the manufacturing industry. Since acquiring the portco, they knew that the company’s older ERP system would need to be replaced. Knowing that the selection and implementation would be a lengthy process, they were urgently seeking a consultant with experience in the manufacturing industry at the same scale as the portco that could guide them through what needed to be evaluated before making a selection and then manage the entire process. After quickly understanding the key needs of our client, we were able to match them to a curated couple of ERP selection consultants in our network within 24 hours. Selecting their ideal choice, the client was able to quickly and confidently kick off their ERP selection process.

Read the full case study here. Have a similar need that you would like to connect with us on? Contact us here and a team member will be happy to begin helping you within 24 hours.

Immediate strategy session facilitator

Firm immediately needs strategy session facilitator for portco

A PE firm principal came to us with an immediate need for a strategy session facilitator for their software portfolio company. Having recently acquired the business, the firm wanted to quickly get the portco into strategy sessions so that they could start defining long-term goals. Needing structure for these sessions, they were looking for a facilitator that was a former executive or management consultant and had software industry experience. They immediately needed someone to remotely lead the session and help the portco form and prioritize goals.

BluWave identifies top consultant with software experience

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade strategic plan facilitation needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of strategic plan facilitators that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with two select pre-vetted facilitators from our invitation-only Intelligent Network that fit their exact needs.

Firm engages strategic facilitator to formalize and structure portco goals

Within 24 hours of the initial scoping call, the PE firm and portfolio company were introduced to two PE-grade strategic plan facilitators that had software and prior executive/management consulting experience. The client selected their ideal choice. The PE firm was able to confidently hold a strategy session for their portco that was expertly structured and facilitated, leading to clear and defined long-term goals for the company.

A Record-Breaking Year for PE: Pitchbook’s Q2 Report

With PE funds fighting an uphill battle last year amid a global pandemic, Q2 2020 industry reports were shrouded in uncertainty. Across the globe, organizations fought against a looming economic collapse as businesses folded and life as we knew it shut down for months.

Despite the shifting tides, we witnessed first-hand the resilient nature of the private equity industry. Around this time last year, we published our analysis of the National Bureau of Economic Research’s study on PE and financial fragility that found that PE-backed companies were more resilient and rebounded more quickly than their non-PE-backed peers during the crisis.

One year later, we’re seeing that the study held up…and then some. In the last 18 months, the PE industry has shown tremendous growth despite an ever-changing economic environment. In PitchBook’s Q2 2021 US PE Breakdown, it was reported that middle market and billion-dollar deals are reaching unprecedented levels “thanks to the speedy economic recovery, demand for high-yield debt, an abundance of dry powder, and the looming threat of a capital gains tax hike.”

The report outlined how surging LP activity has brought not only the PE industry but also those it supports from harrowing lows to meteoric highs in just a few months. Here are some key highlights from Pitchbook’s Q2 findings:

Overall Market Trends: A Record-Breaking Year

  • PE firms have closed on 3,708 deals worth $456.6 billion in H1, which is about two-thirds of the total deal value for 2020. H1 2021 is also on track for a record-setting year in PE exit deals.
  • The Q2 inflation pop is signaling a move toward a potential rate increase by the end of 2023. The core consumer price index increased by 3.8%.
  • The White House’s proposed increase from 20% to 39.6% in the marginal capital gains rate has “spurred a dealmaking frenzy.” Pitchbook is seeing business owners race to realize profits from sales before the end of the year.

Areas of Growth: The Driving Factors

  • Funds worth $5 billion or more (“mega-funds”) accounted for the bulk of capital raised, “but both middle-market managers and first-time funds are also finding success as the increased appetite for PE benefited funds of all sizes.”
  • Corporate bonds and private debt also accrued significant activity in Q2.
  • Investment in cybersecurity is on the rise. PE dealmaking in software continued to post was strong in Q2 2021 and cybersecurity emerged as a particular area of focus. This makes sense, as the pandemic also engendered an increase in remote-work-related cybercrime.
  • Distributions to LPs and high returns numbers across all fund sizes are set “to provide additional tailwinds” moving forward. Also, platforms that saw significant expansion under PE sponsors are now coming to market and achieving healthy valuation step-ups.

As our economic recovery continues, many PE firms and PE-backed companies can start to look past pandemic-related issues and get back to their missions: building and scaling stronger businesses. Having the hard data to demonstrate the powerful buoyancy of private equity, we can move forward confident that it’ll take more than a sudden recession to curb this industry.

To read the full Q2 report, visit Pitchbook’s site here.

Interested in gaining more detailed Q2 insights? Check out our Q2 report here.