Function: Operations

In the Know: Proactive Due Diligence Practices

November 19, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Keenan Kolinsky, BluWave Consulting Manager, shares some of the proactive due diligence practices we see PE firms take that separate the more innovative private equity firms from the others. Learn more by watching the video below.

Interested in connecting with PE-grade specialized due diligence providers for your next need? Contact us here to quickly get connected to the ones you need.

Video transcript:

Due diligence is a critical piece in the private equity deal cycle, and we equip hundreds of leading private equity firms with the right PE-grade diligence providers they need – and when they need them. Performing thousands of projects every year, we gain a unique perspective to some of the more proactive and innovative approaches to the diligence process, and I want to share two such approaches we’ve seen that are separating some of the more proactive private equity firms from the others.

Number one, using the right diligence providers for the right deals. Many private equity firms have a go-to list of commercial, IT, and operations diligence providers they leverage for nearly every deal. However, each deal’s different and may require a different slate of providers to get the most out of each unique diligence phase, or diligence stream, depending on a variety of factors such as the target’s industry, the deal size, target technology or operational nuances, timing, and more. Many of our proactive private equity clients realize these nuances, and we support them by connecting them with the diligence providers whose functional capabilities, expertise, and experience account for these factors – uniquely positioning them to deliver excellence on that deal. This allows private equity firms to gain better insights with more speed and certainty, which, in turn, optimizes the entire diligence process for the respective deal. In private equity, one size does not fit all.

Number two, expanding the functional breadth and depth of diligence. Times are changing, and it’s more important than ever to get diligence right and to gain the necessary actionable insights, not only to make a more informed investment decision, but also to begin equipping the value creation plan. Especially in today’s market, value creation doesn’t and can’t end with only commercial, technology, and operational levers.As such, many of our proactive private equity clients are institutionalizing increasingly common diligence streams such as HR, digital, data, and ESG diligence to inform both investment decisions and value creation plans. We continuously map the market for PE-grade diligence providers across various functional areas, industries, price points and more so that you don’t have to.

If you or your teams are using the same slate of diligence providers for every deal, it may be time for a refresh. As you start to consider your slate of diligence providers for your next deal, give us a shout at info@bluwave.net and let us connect you with the right diligence providers for the right deal.

In the Know: How to Action BI & Analytics Experts

November 10, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Jeremy Yoder, a BluWave Strategic Account Executive, shares how to action BI & Analytics experts, detailing the different use cases firms and other proactive companies have for bringing in data & analytics experts. Learn more by watching the video below.

Get connected to a BI & Analytics Expert.

Video transcript:

In our increasingly digital world, business intelligence and analytics is a growing input factor for companies to measure their level of growth and for private equity firms to evaluate the success of their portcos. PE firms come to BluWave with needs for data and analytics specialists who can help drive effectiveness and efficiency within their portfolio companies. Here are just a few of the most common use cases we see for why a firm brings in data and analytics specialists.

Number one, developing more measurable metrics at the portco level. The first step to making data-driven decisions is having the right metrics and reporting measures in place. Many companies are lacking this when their first PE sponsor comes into the picture, so our clients equip their new portcos with specialists who can help companies build a solid metrics and reporting foundation. This gives the PE firm visibility into how their portcos are tracking against those set goals.

Number two, data diligence. For companies with large sets of data on products and customers like companies in the B2C sector, there is often hidden value hiding within these datasets if they aren’t being analyzed. When companies aren’t actioning the data available to them, leading PE firms bring in specialists to uncover what stones are being left unturned and help glean risks and actionable opportunities from the data that already exists.

Number three, cleaning and assessing data. The most forward-thinking PE firms are using specialists to clean and assess their portcos data so that they can improve the precision of their evaluations and more deeply inform the health of their organizations. We have a deep bench of business intelligence and analytics providers at the ready for a variety of niche needs. To get connected to the PE-grade,exact-fit provider you need, contact us at info@bluwave.net.

Urgent need for sales & marketing focused org design consultant

PE firm needs consulting group to improve sales and marketing functions

A PE partner came to us with an urgent need for a boutique sales consulting group that could perform a sales diagnostic for their software portfolio company and help with org design for the company’s sales and marketing functions. With the head of marketing no longer at the company, the firm was looking to reset the sales and marketing function to improve growth. They needed someone to come in, assess the current sales and marketing function, identify what channels they should be focused on, and then give them guidance on how to build the department and who to hire in order to achieve growth. The firm needed this guidance as soon as possible and were ideally hoping it would come from someone with past marketing experience, and M&A expertise.

Using pre-vetted network, BluWave identifies exact-fit providers

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade org design and consulting needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of specialized boutique consulting firms 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 groups and independent consultants from our invitation-only Intelligent Network that fit their exacting needs.

Firm engages ideal org design consultant to improve the portco’s sales and marketing

Within 24 hours of the initial scoping call, the PE firm and portfolio company were introduced to three select PE-grade org design consultants that specialized in organizational design & assessment for sales and marketing functions in software companies. The client selected their ideal choice and the firm was able to confidently build out a hiring plan that would allow them to reset their sales and marketing functions and achieve growth thanks to the work of the provider we connected them with.

Critical digital marketing independent contractor to advise software portfolio

Firm needs consultant to enhance digital marketing efforts across portcos

A PE managing director came to us with a critical need for a product marketing and positioning independent contractor who could advise several of the tech and software companies in his firm’s portfolio on their digital marketing efforts. With the digital world evolving quickly, the firm was in critical need of someone who could help their portcos enhance their digital marketing capabilities to best position themselves against their competitors. The firm was looking for someone who could advise on digital content, SEO, and other marketing activities as it related to each company’s product and brand positioning goals. It was crucial that the provider had industry experience and proven functional expertise.

BluWave has exact-fit, PE-grade digital marketing consultants

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade marketing needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of expert marketing independent contractors 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 marketing resources from our invitation-only Intelligent Network that fit their exacting needs.

Firm chooses ideal provider to improve the digital positioning of their portcos

The day after the initial scoping call, the PE firm and portfolio company were introduced to three PE-grade marketing independent contractors that specialized in digital content, SEO, and broader marketing activities for software companies. The client selected their ideal choice. The PE firm engaged the provider and was able to gain confidence in the digital positioning of each company in their portfolio thanks to the advisor’s help.

Merger integration consultant urgently needed for software & industrial services merger

PE firm critically needs merger integration experts

A PE operating partner came to us with a critical need for a merger integration consultant to help them develop a playbook, provide resource coaching, and execute a planned merger of their existing portco with a new add-on in the software sector of the industrial services industry. With a lot of operational integration that needed to be done and the target add-on in the process of acquiring two additional companies, the firm urgently needed a small team of merger integration experts that could manage the complexity of this integration. The PE firm was seeking a provider that had industry expertise, a proven track record of successful merger integrations, and the ability to start in the next month.

BluWave identifies industry-specific consultants within network

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

Firm engages top choice to execute integrations

Quickly after the initial scoping call, the PE firm and portfolio company were introduced to three select PE-grade merger integration providers that had industry expertise and were available to get started immediately. The client selected their ideal choice. The PE firm was able to confidently begin executing the integrations, trusting that the provider BluWave connected them with was handling all of the niche complexities of the situation.

In the Know: The Importance of Interim CFOs

October 27, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from the hundreds of PE firms we work with. In our most recent installment, Erez Schnaittacher, BluWave vice president of client coverage, shares the importance of interim CFOs and why they are a vital resource all PE firms should be taking advantage of. Learn more by watching the video below.

Interested in connecting with interim CFOs? Contact us here to quickly get connected to the exact-fit interim CFO you need.

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Video transcript:

The CFO role is one of the most critical seats in a business. The position plays a key role in ensuring that a business is strong and if PE-backed, that the investment is successful. Because this seat is vital to a company’s success, it is important that it is not left open, and is also filled by someone who possesses the right skillset to execute on the demands that come with being a CFO.

To ensure that both of these are always the case, PE firms often turn towards interim CFOs. At BluWave, we equip our private equity firm clients with interim CFOs for various due diligence, value creation, and prep-for-sale needs. Here are some of the most common use cases for bringing in interim CFOs:

Number one, unanticipated departures. When CFOs unexpectedly resign, it can leave a company’s finance function in chaos. We help PE firms combat this by providing them with exact-fit interim CFOs who can quickly step in, fill the shoes of the role, and keep the ship steady while the search for a permanent placement kicks off.

Number two, longer than normal hiring processes. Even when a CFO seat is expected to be vacant within a certain timeframe, sourcing a candidate to step in at the exact time you need them to can be challenging. With hiring processes taking longer than normal, interim CFOs can help bridge the gap, giving you extra time to ensure you hire the best-fit person for the job.

Number three, professionalizing new portcos’ finance functions. We are supporting many PE firms as soon as a deal closes, by supplying them with interim CFOs. These firms are bringing in these individuals to help new portcos’ finance functions understand what it means to be PE-grade, and help them get the right monthly performance packages in place to ensure that the PE firm is getting the info it needs.

And finally, number four, prep for sale processes. Our clients bring in interim CFOs to respond to diligence requests, assess data, and pull reports prior to a sale. By bringing in an extra set of hands to take care of the extra workload that comes with a sale process, FTEs are freed up to maintain focus on keeping the daily routines going, without causing a delay on the sale process. The modern-day M&A process is fast and furious, valuations decline the second you have to hit the pause button, making it crucial to keep the momentum.

Interim CFOs are one of the most versatile and useful resources available to private equity firms. Hundreds of leading firms come to us with their interim CFOs because of our ability to know before they need, hone in on individuals that meet their specific, unique criteria, and quickly connect them to the select few that are exact-fit.

If we can support your interim CFO needs, please contact us at insights@bluwave.net.

PEI Operating Partners Forum – New York 2022 Event Recap

October 27, 2022 Delaney Walker

On October 19th and 20th, 2022, our team had the opportunity to attend and sponsor the PEI Operating Partners Forum – New York 2022. It was PEI’s largest event to date with over 500 PE ops professionals in attendance, a testament to the growing ops function in private equity.

At the conference, our founder & CEO, Sean Mooney, hosted a panel titled, “Unlocking the Due Diligence Imperative to Rapidly Achieve the Value Creation Plan”. The panelists – Cici Zheng of ParkerGale Capital, Marc Jourlait of The Riverside Company, and Kalyan Mukherjee of Apollo Global Management – all shared insightful thoughts on this topic and we have captured some our key takeaways below:

Leveraging Diligence Streams to Inform Value Creation

  • Overall, value creation plans are being created and put into place earlier in the process than has been done historically.
    • Benefits include building trust with the management teams and having the time and information upfront to formulate a more fully baked value creation plan.
  • Ops teams find it critical to work with specialized groups for commercial due diligence that already know and understand the market.
  • Areas assessed upfront in diligence to help ops teams better understand risk include human capital, technology, operations, and ESG.

Working with Deal Teams & Managing the Diligence Chaos

  • Ops teams have discovered that working with deal teams from day 1 helps avoid any post-close surprises.
  • Early work with the deal team helps the ops teams better understand what the deal team is underwriting for, allowing the ops team to better prioritize and position value creation plans.
  • Many firms are leveraging technology to manage the many diligence processes that are happening at any given time.

We greatly enjoyed learning from these thought leaders and connecting with both familiar as well as new faces at the PEI Operating Partners Forum – New York 2022. You can learn about specific ways we equip PE operating professionals with the exact-fit, specialized third parties they need here. If you have an immediate need we can support, contact us here and we will immediately get started.

ESG consultant needed across portfolio

PE founder needs ESG consultant for 3-year plan

A PE firm founder came to us with a critical need for an ESG consultant that could help their firm develop an ESG plan and implement it across their portfolio. Having recently recognized the growing importance of ESG to GPs and LPs, they urgently needed a specialized consultant to help with their planning on how to effectively implement ESG initiatives at both the firm and portco level. The founder wanted a provider who could build out a 3-year ESG implementation plan focused on the most critical aspects of ESG from an LP’s perspective, as well as help them implement practical efforts to integrate ESG into their standard due diligence process. Ultimately, the founder needed a best-in-class ESG consultant who understood their size fund and how LPs looked at them, could build out a strategic plan that the deal team could execute, and support the firm with the timing of the implementation.

BluWave identifies top provider for client’s needs

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade ESG consultant needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of ESG consultants 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 exacting needs.

Firm confidently engages provider to begin ESG strategy work

Within 24 hours of the initial scoping call, the PE firm was introduced to three top ESG strategy providers that met their exact criteria. The founder selected their ideal choice. The PE firm was able to confidently engage a top ESG consultant to build out the plan they needed to implement ESG efforts across both the firm and the portfolio.

Full value creation vitally needed for carveout

Firm needs value creation providers across services

A PE firm came to us with a critical need for multiple value creation providers for a recently acquired manufacturing portco. A new carveout from a large company, the firm needed to engage multiple providers to aid with the carveout process over the next 14 months before the TSA that extended critical services ended. They needed PE-grade providers for IT strategy and implementation, hardware replacement, cybersecurity assessment, an interim CFO role, capacity planning and operations improvement, and procurement & sourcing. Each provider needed to meet a unique set of criteria in order to suit the firms needs for the new carveout.

BluWave indentifies pre-vetted providers for each need

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade carveout 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 for each carveout need, and then connected the client with the select pre-vetted providers from our invitation-only Intelligent Network that fit each one.

Firm engages PE-grade providers with exacting expertise

Within 24 hours of the initial scoping call, the PE firm and portfolio company were introduced to the first set of providers they needed that specialized in the manufacturing industry. For each carveout need, we presented select providers, and the client then selected their ideal choice. The PE firm was able to quickly engage a variety of top providers to meet each of their needs and ultimately, ensure a seamless carveout process.

Compliance group urgently needed for quality control process

Urgent need for FDA compliance group

A PE firm’s principal of operations came to us with a critical need for a compliance group that could help them assess a target pharmaceutical manufacturing company’s FDA-certified quality control process. Working on a fragile deal, the firm needed an expert provider who could assess the company’s processes in order to ensure they were well-documented, identify if there could be issues in the future given where the FDA was going, and note if the results from a recent FDA inspection were kosher. The firm needed the provider to be PE-grade, understand the pharmaceutical space, and be enough of an expert to also provide recommendations as they performed the audit.

BluWave finds exact-fit provider to match firm’s needs

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade compliance & regulatory needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of compliance & regulatory groups as well as independent consultants 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 pre-vetted provider from our invitation-only Intelligent Network that fit their exacting needs.

Firm engages presented provider to conduct quality control

Within less than 24 hours of the initial scoping call, the PE firm was introduced to an exact-fit PE-grade compliance group that specialized in assessing FDA quality control processes .The PE firm confidently engaged the provider to conduct the audit. Thanks to the provider’s work, the firm was able to gain the insights they needed on the current state and needed improvements of the target’s processes in order to move forward with the deal.