Have a PE-owned company as a client. I’m on a growth strategy case, and the PE folks are really looking to sell this company ASAP. Beyond the obvious “how will this growth strategy boost this company’s EBITDA fast,” what other questions should I be anticipating when presenting to the PE folks?

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OP - if you’re working on a growth strategy project immediately before a sale process, your work will be used as marketing material to justify the “management case” projections and help get buyers excited about what they can do with the business.

The PE firm is going to want aggressive but reasonably grounded growth forecasts along with a rough cut at the investment required to achieve it - something like “if we want to expand into Mexico, we’d need [4] new sales reps and [1] manager which will cost $xx and we think they could achieve run rate sales of $yy in [18] months”

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Yeah it’s worth clarifying if this is VDD or true growth strategy. VDD is just focused on market data for marketing purposes.

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How much of any new revenue is recurring (subscription, service agreements, etc.) would be good to understand when they go to sell depending on what type of business it is

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They’ll probably also be curious about how the growth impacts the multiple. Diversification can help with this along with reducing risks from a revenue perspective.

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Thank you!

Seems obvious but COVID recovery and/or second-order macro conditions

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How will they exit? Acquisition? IPO?

In this vein, identifying likely strategic acquirers is good too. Though that’s mostly the banks job

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What will their balance sheet look like when they want to exit? As in do they need to clean up debt or any other liabilities owned? What type of assets do they own, what percent of that is cash vs equipment vs real estate.

How will their product mix change from now until where they want to be? Ie do they want to target a few massive clients or service the masses. Just a few I can think of

Thank you! Super helpful laundry list.

Why are you asking this here? Why aren't you leveraging the team and extended team?

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