This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

New Survey: Half Of Private Equity Executives Focus On Operational Improvements Before Signing Letter Of Intent

NEW YORK, April 29, 2014 /PRNewswire/ -- Today, The Deal, TheStreet's (NASDAQ:TST) institutional business, 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.
The Deal logo.

"Our survey results reveal some of the thinking that goes on in the middle market private equity space, looking at everything from when and how operational improvements are considered to how employees impact these changes," said Jeffrey Kanige, Editor in Chief of The Deal.  "What was most interesting to hear was feedback about private equity thinking pre- and post-crisis. Those tough financial times are undoubtedly playing a major role in decision-making today."

Survey highlights include:
  • 48.4% of those surveyed said they begin focusing on operational improvements before signing a letter of intent while only 11.6% said they begin after reaching a definitive agreement and 11.6% said they do so after closing.
  • Asked how they plan for operational improvements after closing, 47.5% said they use a 100-day program, while just 16.8% said they use a three- to five-year plan.
  • Nearly 80% 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. Healthcare cost improvement was seen as the least important issue.

"In an environment where middle-market private equity firms are holding onto portfolio companies longer, it is of strategic importance to the funds to focus on operational improvements within these companies to create value and returns," added Bruce K. Fenton, partner and chair of the Private Equity Practice Group and Investment Funds Industry Group for Pepper Hamilton LLP.  "We are seeing many of these issues with our private equity clients around the country and it is helpful to be able to share these insights of senior private equity professionals."

The full report is available online.

About the SurveyThe survey was fielded electronically via private invitation to senior private equity executives from The Deal's proprietary database during February and March 2014. 120 private equity professionals with an operational focus participated, sharing insights on size of funds being invested; industries and geographies where they invest; at what point in their process they turn the focus to operational improvements; what operational areas of the business they most closely examine; and how often the results of their operational improvement strategies matched their initial assumptions.

About The DealThe Deal, a business unit of TheStreet, has been serving corporate dealmakers, advisers and institutional investors the most sophisticated analysis of the deal economy since 1999. Our transaction information service, The Deal Pipeline, is powered by a newsroom of senior journalists who offer proprietary research and reporting across M&A, bankruptcies, auctions and financings. It includes a breaking news service, First Take; daily and weekly sector newsletters; The Daily Deal, a 2x daily report of the day's top stories; a research center with over a decade's worth of intelligence and a database of over 100,000 deals; and an iPad & iPhone app. Our marketing & media services group produces the industry's leading forecasting event, The Deal Economy, held annually in New York City in addition to industry webcasts and integrated marketing programs. For more information, visit www.thedeal.com.

About Pepper Hamilton LLPPepper Hamilton LLP  is a multi-practice law firm with more than 500 lawyers nationally.  The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world.  The firm was founded in 1890. For more information, visit www.pepperlaw.com.

Logo - http://photos.prnewswire.com/prnh/20140306/NY78400LOGO

CONTACT: Emily Scheer212.321.5521 Emily.Scheer@thestreet.com

SOURCE TheStreet, Inc.

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs