For growth oriented private equity firms success is dependent on the ability to drive revenue growth to improve portfolio company value over investment horizons. But only so much time exists to get this done to maximize exit value.
A recent BDO survey indicated that organic growth is the most important way PE firms increase portfolio company value and maximize return on investment:
The Impact of Top Line Growth for Private Equity
There are many reasons small and mid-sized portfolio companies fail to maximize their year-on-year revenue growth performance.
- Turnover in senior marketing and/or sales leadership
- Poorly targeted growth planning
- Insufficient prospect/customer information
- Fuzzy marketplace positioning
- Lack of a sales planning discipline
- No sales accountability program
Every month portfolio companies under-perform revenue growth targets has a detrimental effect on financial return for PE owners.
Over a six year holding period a $30 million/year portfolio company that under-performs a target +10% yearly revenue growth rate can have a significant impact in the form of lower profits and valuation upon exit:
Ascension Support for Portfolio Companies
Through our considerable work for PE firms and their portfolio companies we’ve developed two pre-packaged programs. They are designed to accelerate top line revenue growth and improve the financial return for equity owners.
Program # 1: Pre-Acquisition Strategic Marketing/Sales Assessment
Calibrate – a 30 day pre-acquisition revenue potential assessment performed by two Ascension consultants:
Calibrate provides PE firms with an objective assessment of potential acquisitions across six important revenue producing dimensions:
Program #2: Post-Acquisition Marketing/Sales Effectiveness Program
Jump Start – a six month marketing/sales assistance to portfolio company management:
Jump Start provides hands-on assistance to portfolio company general managers and marketing/sales leadership to improve targeting and refine marketing/sales processes. The program provides support in six operationally significant areas:
Contact us and let us help you accelerate growth in your portfolio companies.