Insights Into the PE World
THE MAINSHEETOP BLOG
IoT: How Much Steak, How Much Sizzle?
When it comes to the Internet of Things (IoT) and its applicability to creating value in the products and services of lower middle (LMM) and middle market (MM) industrial companies, is it all sizzle and no steak? It’s a critical question, because these markets can’t survive on sound and scent alone – they neat to add real meat to their bottom lines. The question has come up more than a few times during my travels in Europe and the U.S., and it’s been flavored still more (clearly, food is on my mind) by [...]
Using the 4W Framework to Rationalize IoT Investments
Developing IoT solutions for existing product lines is increasingly important to industrial companies of all sizes and scopes, primarily because they’re seen as important value-adds without the need to reinvent the wheel itself. One example: manufacturers are adding sensors to their devices in order to provide customers with a preventative maintenance service – the product is monitored and, when necessary, serviced, without inconveniencing the customer. The result: no disruptive field failures, the product’s service life is extended, and by extension the brand enjoys a stronger affinity from the customer. That’s the theory, anyway. [...]
3 Steps to Building a Successful Platform Play
With more than a trillion dollars of dry powder waiting to be put to work, buyers are eager to identify and close new deals in order to put capital to work. But as valuations have risen and EBITDA multiples have flattened, it has become essential that funds adopt a structured plan for implementing operational improvements and value creation at their portfolio companies. Under these conditions, platform roll-ups have become an important tool in building portfolio value. But a platform is more than a collection of companies in the same general business. Building a [...]
A New Formula for PE Deal Success – The Fractional CFO – Outliers LLC
The private equity formula is simple. PE investors expect their portfolio CEOs to drive positive, measurable changes that led to healthy exit options. In a majority of cases, however, that formula is being turned on its head, with the exits coming from the CEOs themselves (73% of them, to be exact) along with corresponding hits on costs, valuations, and plan goals. Clearly, the formula needs to change, particularly in an era when mounting deal pressures and lengthening hold periods are creating a kind of perfect storm that could result in even more CEOs heading [...]
A New Formula for Creating PE Deal Value, Stability
The private equity formula is simple. PE investors expect their portfolio CEOs to drive positive, measurable changes that led to healthy exit options. In a majority of cases, however, that formula is being turned on its head, with the exits coming from the CEOs themselves (73% of them, to be exact) along with corresponding hits on costs, valuations, and plan goals. Clearly, the formula needs to change, particularly in an era when mounting deal pressures and lengthening hold periods are creating a kind of perfect storm that could result in even more CEOs [...]
Building a Board that Works for Middle Market PE Firms
High asset prices have placed enormous pressures on middle market private equity management teams to execute ‘the plan.’ While we previously focused on how an Operating Partner can help prevent the epidemic in CEO turnover plaguing many such operations, in this post we want to talk about an equally important component of the equation: identifying and building an effective Board of Directors. It goes without saying that the BoD is critical in ensuring investor returns. And while the nature of the BoD roles and where they should invest their time and energies are somewhat [...]