How to Survive and Thrive Through a PE Exit

A PE exit can be a very stressful and time-consuming event for a portfolio company. The bulk of the work almost always falls on the portfolio company Management Team which is not only stressful for the team but also puts KPI's at risk.

Based on our combined 90 years of experience, we know that the best exits occur when a company is firing on all cylinders AND is able to flawlessly execute on the myriad of details that must be managed leading up to an exit. And that requires a management team that is confident, informed, and most importantly well supported.

That’s where we come in. With the support of our corporate development resources, the management team will not only survive what can be a stressful process but will thrive through it and beyond!

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A Collaborative and Phased Approach to a PE Exit

You want the last quarter before a sale to be your best quarter ever.​ To help the management team achieve this, we leverage a phased approach and collaborate with the PE firm to ensure that critical and time-intensive tasks are handled by experienced professionals. This allows the portfolio company Management Team to focus on their core value drivers and company KPIs while we enable, prepare, and support the organization through the process.

We work hand-in-hand with the Management Team and PE firm to execute a phased approach that will enable and prepare not only the Management Team but also the rest of the organization. We provide coaching and counseling along the way to ensure the Management Team shines and that the company presents in its best light.

Phase 1 - “Telling Your Best Story”

Before initiating a sale process, the business should first assess its readiness for sale and, more importantly, identify areas that can be refined before a potential buyer begins their due diligence. To achieve this, we leverage the expertise of professionals with firsthand experience in buying and selling businesses. We understand what buyers look for and how to strategically position the business for a successful exit. While financials are our primary focus, we also consider other essential factors that contribute to the business's overall value. Effectively, we help the business find and tell its best story and drive consistency of this story through the exit process.

While some of the specific metrics will vary from industry to industry, some of the key considerations are:

• Assessment and understanding the key critical KPIs.

• Management Team Strength and Gaps and Critical non-management roles.

• Technology infrastructure.

• Compliance / Regulatory Assessment and Stress Test.

• Buyer profile assessment.

Phase 2 - “Don't Lose Focus on the Big Picture”

In this phase the business is actively prepared for sale through interventions designed to increase the desirability of the business.  This can be fixing critical issues identified in the Assessment Phase, making key hires (or fires) or engaging outside SMEs to do technology /security testing. Further, the CDC process actively engages in the transaction by acting as the key conduit for the data room / due diligence. 

Having been through the process before, we know what the buyer will want to see (and is entitled to see) and how the PE firm prefers to show data, which makes the process more efficient and de-stresses the management team, the employees and the PE firm. Most importantly, it frees the management team to continue to focus on day-to-day activities and perform strong through the close of the deal (and beyond).

Some tactics might include:

• Overseeing the data room and the due diligence process.

• Preparing the management team for interviews.

• Acting as a liaison with the buyers, lawyers, bankers, accountants and other professionals.  We speak their language.

• Communicating to the management team, employees and ownership about the process, and closing critical gaps.

Phase 3 - "Positioning for Sustained Growth”

It may seem like this is the acquirer’s problem….and it is.  However, assuming the acquirer plans on continued growth, getting clarity on that point for the management team and staff will help ease the transition process for everyone. In fact, having CDC stay with the company through the conversion has several benefits, including:

• Ensuring that the Management Team and employees feel supported in transition.

• Ensuring a smooth hand-off of any integrated systems or procedures and reducing entanglements with the previous ownership.

• Continuous on-the-ground learning of best practices in Stages 1 and 2.

Tactics for this phase could include:

• Acting as conversion manager during the de-integration period, allowing senior management to concentrate on the mission critical issues in conversion.

• Spearheading cost and revenue synergy initiatives (from the view of the acquired).

  
  

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Let us help your team focus on what's important for a successful exit.

With the support of our corporate development resources, the management team will not only survive what can be a stressful process but will thrive through it and beyond! We are confident that our approach will conclude the sale with satisfied buyers, content sellers, and a company that experiences a smoother transition than anticipated.

For more information or support, please contact us!