Restructuring the Hold Optimizing Private Equity and Portfolio Company Partnerships

Establishing an effective partnership and achieving improved outcomes for investors and management teams during the hold cycle 

Private equity represents a productive and fast-growing asset class—building businesses, creating jobs, and providing unlimited opportunity for investors and management teams alike, particularly if they know how to work together in candid and effective partnerships. Restructuring the Hold demonstrates how investors and managers can best work together to optimize company performance and the associated rewards and opportunities for everyone, not just the investors.

Through brief references to the parable of the Gramm Company, a middle market portfolio company, readers will follow the disappointments and triumphs of a management team experiencing their first hold period under private equity ownership, from the day they get purchased through the day they get sold. Restructuring the Hold provides the reader both general knowledge and more detailed better practices and frameworks relating to specific time periods during the hold. Within this book readers will find:

• An examination of a typical middle-market private equity hold period
• Guidance for newly acquired management teams on what to expect during the hold period
• Descriptions of better practice operating cadence between investors and management teams
• Examples of effective partnerships between investors and management teams
• Discussions of topics relevant to typical hold periods, including organizational structures, operations improvement, selling pipelines and acquisition integrations

With guidance from Restructuring the Hold, private equity principals and portfolio company executives can take steps toward greater collaboration and better outcomes. Through updated practices and strong relationships, they can partner effectively to improve portfolio company performance, which will lead to better outcomes for both investors and management teams.

THOMAS C. ANDERSON is a long-time Operating Partner, Chairman, and Board Director, previously with The Riverside Company, a global investment firm focused on the middle-market. He currently works with companies in active Board roles to accelerate growth and prepare for successful transactions.

MARK G. HABNER is CEO of BeckWay Group, which he co-founded with Anderson as an operating company serving private equity and their portfolio companies, providing hands-on expertise to accelerate sustainable earnings growth.

List of Figures

Foreword

Preface

About the Authors

Introduction

Core Audience, Organization of the Book

Chapter 1: Private Equity

The Asset Class, The Middle-Market, The Investment Cycle, The Motivation

Chapter 2: New Ownership

The Ideal Partnership, Anticipating Management Sentiment, Key Investment Period Roles, Operating Partner Involvement, Core Values

Chapter 3: Month 1, Consternation

Onboarding Together, Confirming Portco Leadership, Teaming Authentically, Overcoming Resistance

Chapter 4: Month 2, This Might be Okay

Baselining the Investment Period, Reporting Monthly Financials, Starting with Momentum, Identifying Value Sources

Chapter 5: Month 3, Guarded Enthusiasm

Generating and Aggregating Ideas, Evaluating and Prioritizing Opportunities, Profiling and Planning Initiatives, Suspending Strategic Planning Formalities, Finalizing the Value Creation Plan

Chapter 6: Quarter 2, A Bit Overwhelmed

Ensuring Leadership Coverage, Organizing the Value Creation Team, Managing the VCP Program, Targeting, Tracking and Triaging Value Creation

Chapter 7: Quarter 3, Gaining Momentum

Managing with Performance Indicators, Standardizing Operating Cadence, Incorporating Board of Directors, Overcoming Bumps in the Road

Chapter 8: Quarter 4, Ringing the Bell

Confirming VCP Results, Rewarding Success, Planning Strategy Pragmatically, Integrating Plans and Budgets, Embracing a Continuous Performance Cycle

Chapter 9: Year 2, Improving Infrastructure

Organizing Effectively, Operating Efficiently, Sourcing Strategically and Spending Economically, Financing Internally

Chapter 10: Year 3, Expanding Beyond

Optimizing Profitability, Pricing Intelligently, Pipelining Systematically, Integrating Pragmatically

Chapter 11: Year X, The Exit

Exit Timing, The Exit Process, Exit Preparation, Enjoying the Rewards

Chapter 12: Conclusion

References

Index

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.