Function: Deal Team

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.

Prompt HR diligence provider willing to go the extra mile

PE Firm needs HR diligence for fintech target

A private equity firm came to us with a critical need for an HR consultant to conduct HR-focused diligence on a new target in the fintech space. With the target under LOI, the firm wanted to go a step further than normal and have an HR expert come in immediately to look at data such as employment contracts and compensation agreements, summarize the strengths and weaknesses they identified, find gaps in the current HR system, and then come in post-close to fix those gaps.

BluWave identifies provider with industry expertise

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade HR diligence needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of specialized diligence 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 the select pre-vetted HR diligence resources from our invitation-only Intelligent Network that fit their exact needs.

Firm engages provider and receives top results

Within 48 hours of the initial scoping call, the PE firm and portfolio company were introduced to the PE-grade HR diligence provider that specialized in HR diligence and consulting for PE-backed companies. The PE firm was able to confidently drive an excellent outcome without wasting time and was so pleased with this resource that they brought them on for a project with another portco a week later.

Market study immediately needed from specialized provider

Firm urgently needs market study for target portco

A PE firm investment vice president came to us with an immediate need for a time-sensitive market study on a potential deal they were looking at in the home safety aspect of the construction industry. With their go-to commercial due diligence providers unavailable due to capacity constraints, the firm was in a crunch to find a provider that could fill their need quickly, while also having the experience they desired in new construction multifamily apartment buildings in the southeast.

Using pre-vetted network, BluWave identifies two ideal providers for client

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade commercial due diligence needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of market study 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 the select pre-vetted commercial due diligence provider from our invitation-only Intelligent Network that fit their exact needs.

PE firm engages specialized commercial due diligence provider to complete market study

Within 24 hours of the initial scoping call, the PE firm was introduced to two PE-grade commercial due diligence providers that specialized in the construction industry. The client selected their ideal choice. The provider had run several engagements in the home safety area in the past year and a half. The PE firm was able to quickly engage a provider that had the expertise they needed to fully understand the target’s market and whether or not the deal was worth pursuing.

How we did it: Immediate CDD advisor with software experience to assess potential target for PE VP

July 27, 2021 Kyle Johnson

A PE fund vice president came to us with a critical need for a commercial due diligence provider that could complete a proactive market study for an asset that they expected to come to market in the next month. With their go-to providers at capacity, no access to the company’s information, and a desire to understand the major players in the IT management software market before the target went to market, the fund was in critical need of an available provider that could perform a full market study in the next week. We promptly worked to understand the client’s exact market study needs and were then able to introduce them to two exact-fit commercial due diligence providers within 24 hours. The client selected their ideal choice that had specific experience in proactively assessing industry attractiveness and was able to quickly gain the market knowledge they needed to confidently assess whether or not the potential target was something they wanted to continue pursuing.

Do you have a similar need or any other specific need we can help you with? Contact us here and we will be happy to help you.

Read the full case study here.

Commercial Due Diligence Provider Immediately Needed To Assess Potential Target

Commercial due diligence provider needed for software market study

A PE firm vice president came to us with a critical need for a commercial due diligence provider that could complete a proactive market study for an asset that they expected to come to market in the next month. With their go-to providers at capacity, no access to the company’s information, and a desire to understand the major players in the IT management software market before the target went to market, the firm was in critical need of a diligence advisor that had background knowledge of the IT management software industry and could perform a full market study in the next week.

BluWave identifies top providers meeting client’s criteria

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade commercial due diligence needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of 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 providers from our invitationonly Intelligent Network that fit their exact needs.

PE Firm engages provider and gains needed market insight

In less than 24 hours after the initial scoping call, the PE firm was introduced to the first of the two PE-grade commercial due diligence providers. The client selected their ideal choice that had specific experience in proactively assessing industry attractiveness. The PE firm was able to quickly gain the market knowledge they needed to confidently assess whether or not the potential target was something they wanted to continue pursuing.

Strategic post-merger integration support

Firm vitally needs integration support for ecommerce portco

A PE firm came to us with a critical need for post-merger integration support for their ecommerce portfolio company. Since investing in the company, M&A was part of the strategy but the company had no experience in executing or managing the post-merger integration process. They immediately needed post-merger integration support as they were in the process of acquiring another website that was a duplicate company they planned to merge with the existing portfolio company.

BluWave identifies exact-fit merger integration provider in network

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade post-merger integration needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of merger integration resources 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 groups that specialized in integration and ecommerce from our invitation-only Intelligent Network that fit their exact needs.

Firm engages ideal provider to execute integration

Within 48 hours of the initial scoping call, the PE firm and portfolio company were introduced to the two exact-fit e-commerce integration resources that we identified for them. The client selected their ideal choice. The PE firm was able to confidently drive an excellent outcome without wasting time and opportunity cost and quickly execute their merger integration goals for the portfolio company.

Common Mistakes to Avoid When Preparing A Company for Sale

July 17, 2021 Sean Mooney

After a nearly 20-year career in private equity, I’ve learned to appreciate that it takes just as much work to effectively sell a company as it does to excellently buy a company. It’s also easy to slip up or not pay enough attention to vital steps that could profoundly change the final price upon sale.

Sellers make a number of common mistakes during sale processes, including a lack of advance preparation, not knowing key questions about themselves, and not appropriately resourcing the business to concurrently run operations and support a sale process.  Each of these mistakes causes sellers to lose credibility and slow down their process, which, in turn, increases real and perceived risk, and inevitably kills value.

To help get better outcomes, here are the three most common mistakes we see made when selling your business and how to fix them:

 

Lack of Preparation

As a private equity investor, we made it our business to optimize the sale process. We would talk virtually every month about the right time to sell various businesses.  When we finally decided it was the right time to sell, we, of course, wanted to be in the market within six weeks of our decision.  Even with professional sellers of businesses like PE investors, this decision is often followed by all sorts of scrambling by investors, portfolio company teams, investment bankers, lawyers, and related support professionals to get ready for sale.  For family-held or entrepreneurially-held businesses with fewer resources and less experience selling companies, this process is multiple times more chaotic.

Don’t try to squeeze months of work into six weeks: preparing for sale should start well in advance of the sale process.  Taking some time in advance will enable you to run an aggressive process while also effectively running your business at the same time.

We recently held a management forum for a top private equity find and their managers, during which we discussed best practices for planning for sale.  The key takeaway was preparing for sale should start years in advance, ideally the day the first wire from investors clears, so you can hit the market at any moment when the time is right.

 

Not knowing yourself before you’re asked

Time and time again on the buyside, I’ve asked fundamental questions that should have been known by the sellers, but weren’t.  When we asked these questions, the process had to slow down as their team hustled to find the answers.  These slow-downs give everyone in the process time to rethink assumptions and value.

Make sure you know the following key items before you start an M&A process because you’ll most likely be asked these right at the time you can least afford to pause your process:

  • The size and growth rate of your direct markets
  • Your company’s market share in their addressable markets and how it compares to competitors
  • Volume, revenue, and profitability by customer and product over a trailing 3-year period

Once you know these elements, incorporate them into a detailed financial model that projects your performance over the next five years (make sure you also have monthly projections for the next two years). If you do this, you’ll build credibility with buyers and disarm much of the skepticism that naturally occurs during sales processes.

Also, try your best to predict what buyers will be asking during the sale process.  Have open conversations with your investors, executives, and investment bankers to understand your strengths and weaknesses. Save yourself from having to scramble to produce appropriate reports and information in the heat of the sale process. Having a general idea of what buyers are looking for and preemptively having answers to those questions, disseminating the information to those who need to know, and confirming overall readiness will ensure that buyers feel confident and comfortable when meeting with you and your team.

Truly best-in-class companies bring in third parties to pre-opine on the state and opportunities of the business.  Spend a little money on pre-due diligence, including sell-side quality of earnings reports, tax diligence, market studies, and IT.  The cost is minor as it compares the value of the company, and these third-party stamps of approval from credible advisors will give your buyers confidence that the company is what it is and not see (or go looking for) ghosts during the sprint to the finish line.

 

Under-Resourcing with Interim Staff

The single biggest mistake I saw time and again during my private equity career was understaffing the sale process.  It’s nearly impossible to both aggressively run a sale process and proactively run your company.

Most sellers’ intuition is to put the bulk of the workload on their investment bankers’ shoulders.  Your investment bankers can help, but you are not paying them to be your accountants, lawyers, market strategists, and data entry specialists.  You hire top investment bankers to intimately know the buyers, appropriately frame the opportunity, and manage a process to optimize valuations.  Don’t distract them by getting them bogged down in the weeds.  Let them focus on the job you hired them for and they’ll deliver outstanding results.

Every business undergoing a sale process should bring in some level of interim staff (ranging from interim controllers to interim CFOs) to either help with the production of analyses and data requests or help manage day-to-day operations.  This is a relatively small expense compared to the sums that will be gained by running a fast and credible process.  If you don’t resource appropriately, something usually has to give: either your sale process, your operating results, or both.

We work daily to help top private equity firms, and their portfolio companies and proactively-managed independent companies more effectively assess opportunities and build value.  It’s hard to know who is good: we make it our business to be the expert of experts.

Find out how we can help you during due diligence, value creation, or the sale process!

Large Cap VP urgently needs post-merger integration support

Post-merger integration needed for healthcare portco

A PE firm vice president of portfolio operations came to us with a critical need for post-merger integration support for their healthcare services company. They were five months into the value creation plan for the portco and were in the process of due diligence for an add-on that had a high chance of being executed. They urgently needed someone to come in and lead the post-merger integration efforts at the portco that had healthcare services experience, specifically in the benefits market.

BluWave identifies pre-vetted, PE-grade provider with industry background

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade post-merger integration needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of merger integration resources that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria and then connected the client with a select prevetted post-merger integration group that fit their exact needs.

PE firm introduced to exact-fit post-merger integration support provider

Within 48 hours of the initial scoping call, the PE firm and portfolio company were introduced to the exact-fit match and were so pleased that they decided to quickly engage with them. The PE firm was able to confidently drive an excellent outcome without wasting time and opportunity cost, and the PE firm was able to promptly execute their merger integration goals for their portco.

Interim CFO Urgently Needed after Abrupt Resignation

Firm has immediate need for PE-grade interim CFO

A PE firm came to us with an immediate need for an interim CFO for their automotive aftermarket company. With the existing CFO transitioning out within two weeks after an abrupt resignation, they needed to act fast to find a replacement. Not having the time to sift through candidates, they critically needed a candidate from a focused set of referenced, PE-grade interim CFOs that understood the automotive aftermarket and the nuances to the complex accounting and financials associated with this type of organization.

BluWave connects firm with in-network, pre-vetted interim executives

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

Firm engages their top choice to fill the role

Within 24 hours of the initial scoping call, the PE firm and portfolio company were introduced to the first candidate that had CFO experience in the automotive aftermarket industry. After a series of interviews, the client selected their ideal choice that was able to start immediately and was open to converting to a full-time role. Because the candidate was such a perfect fit, the PE firm decided to convert them to full-time from the get-go. They were able to drive an excellent outcome by quickly retaining this role without wasting time or cost.

Top 8 Best Practices for Preparing for a Value Maximizing Sale

June 11, 2021 Sean Mooney

In today’s competitive markets, private equity companies and their partners are being forced to pay record-high prices for investments in companies. To generate attractive returns, the private equity companies and their managers must create substantial value after closing. One effective way to create value is by running a highly prepared, efficient, and focused sales process. Here are eight best practices for preparing a company for a value-maximizing sale:

Run fast
Time is the enemy of any business sale process. It gives interested buyers the opportunity to overthink diligence items, get bogged down in excessive analysis, and find reasons why they shouldn’t pay the most full and fair market price.

It also extends the opportunities for customers, suppliers, and competitors to discover that your company is in a sales process, which can lead to myriad distractions and unforeseen consequences. From the day your investment banker sends out teasers and a confidentiality agreement, your goal should be to sprint to the finish line.

Perform diligence on yourself
One of the biggest things that can bog down a sales process is when interested parties discover aspects of the business that are different than those represented in offering materials. Not only does this slow the process down, but it also gives counterparties the opportunity to re-negotiate price and terms, often late in the process when the seller’s relative power in the process can diminish.

To avoid this, it is well worth the time and money to do diligence on yourself. Hiring quality of earnings advisors, tax advisors, and even market sizing, competitive landscaping, and IT consultants to do pre-diligence will give you much more confidence going into a process that you won’t encounter a surprise that could impact time and value. Additionally, many of these pre-diligence service providers will enable you to share their findings with interested parties, which will ultimately help you run an even faster and more certain process.

Be prepared to answer key questions
Almost all interested buyers will want to know (i) revenue and gross profit by customer and product over time, and (ii) detailed statistics regarding the size of your addressable market and your related market share. It will be to your benefit to stay prepared with these detailed answers before you start a business sale process.

If you’re not prepared, it is likely that buyers will insist that you take the time to prepare such detailed analyses. Taking the time to do them in the middle of a process is often very distracting, stresses internal resources, and slows down processes at the exact time you don’t want to be slowing down.

Organize your files
Interested buyers are not going to part with substantial sums of money to buy your business without doing comprehensive due diligence. This includes very detailed reviews of nearly every financial report and contract that is relevant to your ownership period (and likely even beyond your ownership period). Take the time in advance to organize all your contracts and financial report and summarize the key terms of all meaningful contracts. Your sponsors, investment bankers, and attorneys will give you guidance on where to focus your attention.

Hire high-quality investment bankers
Investment bankers are experts at maximizing value in the marketplace. The best investment bankers not only know how to pitch an indicative valuation and run a broad process, but also have pre-established relationships with the relevant buyers for companies like yours and an understanding of how your company could or should fit into the strategies of the most likely buyers. Hiring the right investment bankers almost always pays for itself.

Hire high-quality attorneys
Just like investment bankers, hiring the right attorney can add significant value to your sale process. It is more than likely that your buyer will have a highly capable attorney that solely focuses on mergers and acquisitions transactions.

You should also have a highly capable attorney who can adeptly negotiate prevailing market terms and efficiently and effectively protect your interests from liabilities that survive after the initial closing. A good attorney should also know what’s important and not try to win every point in your favor. An M&A transaction involves a lot of give and take. The best attorneys know that intelligent compromise is needed to close a deal.

Polish your presentation
Interested buyers aren’t just buying a company; they are buying the management team. It is imperative to have strong contributions from each of the key members of the management team. Presenting canned PowerPoint presentations, however, is not necessarily the day job of your functional area leaders. Practice, practice, and more practice is critical.

Private equity sponsors and investment bankers also serve as great sounding boards and fountains of feedback and advice as they participate in these types of meetings on a regular basis. There are also professional management meeting presentation advisors that can add tremendous value by giving arms-length feedback and advice free of natural bias that occurs with your existing relationships. We know some really good, PE-tested presentation coaches if you need this type of resource.

Staff up
Preparing for and managing a business sale process is an unbelievable amount of work. Your company is not staffed to manage this level of surge demand. Most of the workload typically falls on the finance staff. Hiring interim staffing to support this surge demand is tremendously valuable in terms of making sure that information requests are met in a timely manner and your company continues to run as well as possible during a trying time.

Moreover, the costs of these interim support personnel are relatively minor as it relates to the total transaction value and can typically be allocated as transaction-related add-backs and closing expenses. BluWave has this world mapped and can quickly pair you with the right group or person to support your finance staff during this critical time.

After working feverishly for years on building and growing your company, the sale process is your final opportunity to monetize the full value of your company for the benefit of you, your team, and your investors. Take every opportunity to prepare in advance, bring in strong advisors and business support resources, and run a fast, competitive sales process so you can optimize the outcome of a rarely-occurring cornerstone event.

Quickly perform digital marketing due diligence on new business

Firm quickly needs digital marketing diligence on target

Understanding the digital landscape has never been more important. Our PE firm client needed a resource to perform digital marketing due diligence for an e-commerce-enabled aftermarket products business. To build confidence in the investment, our client needed to know more about the target’s SEM, SEO, user experience (UX), and transaction process (mobile versus desktop, etc.) capabilities, as well as gain clear insight into the state of the platform itself. Additionally, the client required a quick turnaround time.

BluWave identifies top expert groups to perform diligence

BluWave utilized its extensive experience helping other PE funds with similar digital diligence requirements to intimately understand our client’s needs. Immediately following our scoping call with the PE firm, we connected our client with three expert groups from our invitation-only Intelligent Network. Each one had extensive experience with digital marketing due diligence—particularly in the areas of SEM, SEO, UX, conversion path analysis, Google Analytics, and GTM.

Client engages ideal provider, gaining insight on target

Our client efficiently selected an expert PE-grade group with specific experience in the target’s industry as well as best-in-class e-commerce/online retail experience. Beyond digital marketing due diligence expertise, this group also understood the target’s specific tech stack. The PE firm was able to assess the company with unique insights that enabled them to quickly close on the investment opportunity.

Urgent Interim CEO To Provide Turnaround, Performance Improvement

Interim CEO immediately needed for healthcare portco

A PE firm VP came to us with a critical need for an interim CEO for their multi-location healthcare services portfolio company. The portfolio company was experiencing stalled performance and the firm was urgently seeking an interim CEO that could turn around this problem and improve performance. They not only needed the resource to have the necessary skills but also required that they be in the same city as the portfolio company’s headquarters in order to limit travel concerns.

Using pre-vetted network, BluWave finds exact-fit candidate

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

Firm engages candidate to lead company turnaround

Quickly after the initial scoping call, the PE firm was introduced to a PE-grade interim CEO who was local to the portfolio company’s area and specialized in multi-location company turnarounds. The PE firm confidently engaged the individual and after an initial assessment and interim service, was so pleased with the individual’s work that they hired the executive full-time to lead and execute on the turnaround plan.