Clayton, Dubilier & Rice’s Post

We are Owners is my favourite value at TDM. It encapsulates everything we stand for. This piece by Ben Gisz explains how we apply this principle to our investing and throughout the entire business. It’s a piece I will return to often.

There is a lot of advice here for PE funds on boosting portco growth. On average, there are 5 to 7 levers that are typically part of the recipe: 1️⃣ Streamline operations: Great for margin, helps EBITDA, and more structured to roll out. But less impact on actual value and multiples than expected. 2️⃣ Manage working capital: This is essentially accounting. Consulting firms - esp those rooted in Tax/Audit, love this lever. There's not so much value creation here, as there is stability. 3️⃣ Cost analysis: More accounting. More margin to be squeezed. Less value. 4️⃣ Capital structure and debt management: More accounting + strategic finance. Reducing debt, lowering interest...again, squeezing more margin. We're getting the picture. 5️⃣ Strategic investments and acquisitions: Boom. This is where actual growth - albeit inorganic - typically is found in PE. Unfortunately, instead of solving organic growth woes, in many cases, it can amplify them. 6️⃣ Talent management: Insert new leadership that can solve organic growth. This is the second true growth lever - again, albeit inorganic - available to sponsors. It has the same chances of hitting as an acquisition. New regimes can be disruptive and take time to embed. Up to this point, this lever is the closest to organic growth, where real value is built. These are the levers consulting firms typically help with, and what PE management teams are commonly well-versed in. Then there’s the final lever: 7️⃣ Enhance revenue generation: If we pie-graphed this out as 'the impact of seven levers on exit multiples' - you could no doubt imagine the size of #7's wedge. But this is typically treated as #6b by most funds and consultants. Portco leadership, more specifically the revolving door of Sales and Marketing leadership, is always responsible for solving revenue. Upmarket fund value teams like KKR Capstone have learned to address this head-on. Organic growth via sales and marketing is their tip of the spear. Downmarket mid and small-cap funds tend to struggle on this front. However, there are ways to incorporate organic growth more systematically for those portfolio companies looking for a lift. #privateequity #organicgrowth #valuecreation #b2bmarketing

There may be increased M&A action in several areas in the investment sector as the Autumn Budget nears, with continued consolidation and a more balanced distribution of buyers. Read Today’s ViewPoint from Fred Hansson and find out what’s driving activity, who’s buying, and who’s being acquired. #MarshBerry #MarshBerryEurope #MergersAndAcquisitions #InsuranceBrokerage #Investment

With deal volumes supressed, investment hold times for Private Equity are getting longer and longer. This is increasing the pressure on PortCo financing and targeted exits. Given this backdrop, it is imperative that PE Portcos optimise cash flow, improve their liquidity position, and boost EBITDA performance. From experience we see that all of these can be addressed using Sales & Operational Planning (S&OP). The three vital levers within this being: - Customer Service and Revenue / Margin improvement - Optimised Inventory management - COGS reduction via efficiency and effectiveness gains This short article below explores this and the three key mantras for success in this area. #privateequity #mergersandacquisitions #valuecreation #financingsolutions

Explore the benefits of selling to a Private Equity Firm with our latest article. Discover how they can provide capital, expertise, and new growth opportunities to take your manufacturing business to the next level. https://zurl.co/UAdT #manufacturing #privateequity #businessgrowth #businessbuyers #mergersandacquisitions

Bluerock Value Exchange (BVEX), a long-time, national sponsor of 1031 exchange and Delaware Statutory Trust investment (DST) programs, announced it has fully subscribed BR Diversified Industrial Portfolio II, DST (DIP II) program with $54.9 million in equity from third-party investors. #AlternativeInvestments #WealthManagement #RIA #FinancialAdvisors #registeredinvestmentadviser

📈 Dive into the world of Private Equity 💼💰 Explore the strategic insights, analysis and potential investment opportunities in this captivating case study. #PrivateEquity #StrategicAnalysis #InvestmentOpportunities #FinancialAnalysis #MarketResearch #InvestmentStrategy #PrivateEquityFirm #StrategicInvesting #InvestmentMemorandum #BusinessAnalysis #Finance #InvestmentPotential #CapitalManagement #EconomicAnalysis #FinancialProjections

The trend that will (likely) never stop: Private equity firms acquiring RIAs.  Everyone likes money- more is better, right? RIA owners considering PE should explore numerous PE firms- don’t take the first offer just because it's first- and should involve sell side representation early in the process. And, with any acquisition (the benefit) comes restrictions and control by the acquirer (the potential drawback). 

Crafting a compelling exit story for portfolio companies (Portcos) is crucial as the Private Equity (PE) landscape grows increasingly competitive. One often underutilized yet highly effective lever for this narrative is #StrategicPricing. By making pricing a key pillar of the exit story, PE firms can enhance the attractiveness and #valuation of their Portcos. Learn more about the three pivotal reasons #pricing should be emphasized in exit strategies 👉 https://lnkd.in/gpX5B7_w #PrivateEquity #ExitPlanning

There was surging M&A deal activity in the investment sector as business owners looked to pre-empt the impact of the Autumn budget. Read Today’s ViewPoint from Fred Hansson and find out what’s driving activity, who’s buying, and who’s being acquired. #MarshBerry #MarshBerryEurope #UKMergersAndAcquisitions #InsuranceBrokerage https://hubs.ly/Q02Y2YL10