The Deal and Pepper Hamilton LLP released a special report, Strengthening Companies: Operational Improvement Trends, outlining the findings from a new survey of private equity executives. The survey demonstrated the importance of operational improvement and the thought that private equity firms put into the process.
Survey highlights include -
•48.4 percent of those surveyed said they begin focusing on operational improvements before signing a letter of intent while only 11.6 percent said they begin after reaching a definitive agreement and 11.6 percent said they do so after closing
•asked how they plan for operational improvements after closing, 47.5 percent said they use a 100-day program, while just 16.8 percent said they use a three- to five-year plan
•nearly 80 percent of respondents said they believe operational improvements are more important now than it was before the financial crisis
•respondents agreed that former CEOs and senior executives are most effective at identifying problematic operational issues at every stage: during due diligence, after a definitive agreement and after one year
•the survey also revealed wide agreement that sales execution has been the most important operational improvement to their investment thesis. Health care cost improvement was seen as the least important issue.
Please see full Publication below for more information.
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