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CASE STUDY
Executive Chairman Helps Private Equity Software Company Prep for Sale
A private equity fund had a great track record, raising over $5 billion in capital through the years. After taking one of their portfolio companies – a SaaS technology product – through a formal sales process, bids came in much lower than expected and they concluded they were not going to proceed. Revenue was flat, and they knew that in order to reach a potential exit, an infusion of fresh thinking and leadership was needed.
Rise in Enterprise Value | Increased Cash Flow | EBIDTA Improvement | Quality Lead Flow | Successful Sale
BACKGROUND: The software company was founded by three individuals who handed off operations to a CEO who had strength in running sales, but was missing the financial and leadership skills necessary to make the business succeed. After a failed sale process, the private equity owners decided to make changes to the team with the goal of strengthening and growing the business for another year before going out for sale again.
THE CHALLENGE: After acquiring the company six years prior, the company was sitting with net revenues around $40M with $7M EBIDTA, but despite being profitable, revenues were flat. After running a process, the fund saw a huge deviation in value despite holding the second largest position in their market with a strong, differentiated product. While the team had a mix of good skills, there was a need for better execution, taking current good ideas and translating them to measurable success. As one of the partners said: “there is a need for adult supervision”. While the market was growing double digits, the company was not reaping the benefits of that growth.
What: A private equity backed technology company provided a proprietary software to clients in the fundraising and crowdfunding space.
INDUSTRY: Private Equity
ROLE: Interim Executive Chairman
LOCATION: United States
We get calls from private equity funds who want to grow their portfolio companies to point of exit. In many cases, changes need to be made on the management team or expert leadership is needed to provide accountability, mentorship, and results.
– Robert Jordan, CEO, InterimExecs
SOLUTION: The fund worked with InterimExecs to bring in an Executive Chairman with software and technology experience to work with the CEO and team while zeroing in on improving profitability. We brought in an executive with a wide range of private equity experience who was skilled at taking underperforming assets and making them shine. The goal would be to set clear KPIs, grow the company, package to sell, and take the company through to point of successful exit.
The Executive Chairman dedicated three days per week, coaching the CEO and team, while advising the PE fund partners to ensure good progress was being made.
• Define the company value proposition
• Improve communications and accountability
• Better reporting measures in place with clear KPIs
• Increase revenue through cross selling
• Enter new markets to gain new customers
Ultimately, the Executive Chairman led the M&A process, successfully selling the company.
To learn how an InterimExecs RED Team leader can help you, contact us here or call +1 (847) 849-2800 for a confidential discussion.
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