WHY CHOOSE AVASANT FOR Private Equity CONSULTING?
Private Equity firms have accumulated over $ US 1 Tn dry powder and have been witnessing record elongated exit times. In the fear of low valuation, PEs are preferring to play the waiting game. However, the competition within the industry has heated up, increasing the pressure on PEs to use their dry powder and reduce their exit time. This trend is due to factors such as increased demand for yield, decreased purchase price multiples, and the growing number of participants in the market. The winners in this competitive market over the last 2-3 years have focused on finding investible targets with a sound path to profitability apart from a strong technology play, a clear competitive advantage, a definitive market niche and a strong team. Value creation has taken the central stage to increase exit multiples, from the erstwhile focus on financial engineering. Further, as every company becomes a technology company, identifying and mitigating separation risks and building up a renewed capability becomes critical in a divestiture process.
Avasant helps PE firms maximize their returns from investments in companies that offer digital technology driven services or products and assets that have IT as a function.
Our Services
Tech Services PortCos
Pre-Deal
Market Scan | Pre-Deal Research
Deal
Commercial Due Diligence | IT & Tech Due Diligence | Vendor Due Diligence
POST DEAL/TECH SERVICES PORTCOs.
ACQUISITION & DIVESTITURE
Spin-Off/IT Spend and Size Benchmarking
M&A Strategy/Tech Consolidation
PMO
REVENUE & MARGIN IMPROVEMENT
Rate/Cost/Skill Benchmarking
Bid/Solutioning Review
Account Intelligence
EXECUTIVE WORKSHOPS & INDUSTRY INSIGHTS
Account Intelligence | Ongoing Industry Research | GTM Enablement Workshops
Assets with IT as a Function
Deal
IT Due Diligence | Legal Due Diligence | IT Sizing and Blueprinting
POST DEAL/PORTCOs.
ACQUISITION & DIVESTITURE
TSA Support
Contract Negotiations
Contract & Supplier Governance
Contract Change Management
IT and Tech Integration Strategy
Communication and Change Management
PMO
VALUE CREATION
Strategic Sourcing
IT Spend Optimization
Vendor Rationalization
Business Process Transformation
Software License Optimization
Tech Modernization and Cloud Strategy
Captive-in-a-Box and Right Shoring
ONGOING RESEARCH & SUPPORT
IT AUDITS | TECHNOLOGY TRENDS | CIO as a Service
Our Impact
We have helped investors make profitable and strategic investments in the PES and IT/ITeS sector
We have helped PEs increase their exit multiples and reduced exit times by upto 10% through our value creation engagements
We have enabled Operating Partners in making the right investment choices and enhancing asset attractiveness
Our PE consulting services are supported by Avasant’s technology platforms:
RadarviewTM
Providing industry and technology insights by geography for senior leaders that helps identify and profile tech targets
Computer EconomicsTM
Providing benchmarks for IT Spend and Organization Sizing across 21 industries over the last 40 years
AvamarkTM
Our benchmarking platform, which provides cost, price, and performance metrics for IT operations and business processes
StrativaTM
Providing deep insights into buyer trends of target accounts
Global EquationsTM
Providing intelligence for over 100 locations globally to support the selection of the right sites for shared services centers
Case Study: Mid-Market PE Firm
THE GOAL: Client engaged Avasant to perform a technology due diligence on four leading brands of the target company under consideration for acquisition. Avasant was asked to assess the target company’s IT landscape across strategy, finance, applications, and infrastructure.
APPROACH & OUTCOME:
Identifed red flags within the current IT environment, evaluating inherent risks and separation risks across applications, infrastructure and security.
Developed an optimized organizational model based on future state support requirements. Estimated expenses associated with the potential acquisition (TSA readiness costs, stand-up costs, and standalone costs).
Developed a final red flag report, providing client with key insights into the target’s IT function to comprehensively evaluate target’s IT related risks and capabilities.
Case Study: A leading NA based PE
THE GOAL: To quickly establish an offshore presence to reduce the cost of operations by ~30% for its Tech Portfolio company
APPROACH & OUTCOME:
Conducted a global location assessment and assess suppliers for offshore resources and established relationship with suitable provider by conducting and managing RFP process
Avasant carved out the scope, identified the right delivery location and shortlisted partners based on their profile and expertise
Avasant managed the end to end the process for supplier selection, contracts negotiations, and transition support to ensure go-live is smooth with successful setup of ODC & resource onboarding
Case Study: British PE firm
THE GOAL: Improve EBITDA & valuation through optimization of spend across IT, G&A operations for its Medical Device PortCo
APPROACH & OUTCOME:
Avasant Engaged with the PortCo in a 3 phase Transformation journey with an overall mandate for reducing costs by 35% to 40%
Supported development of the transformation strategy covering all of IT and business processes including F&A, call center operations, billing & collection and order intake
Supported PortCo in conceptualizing and evaluating potential captive and sourcing scenarios including, outsourced and hybrid operating models, and negotiating the IT outsourcing contract. Overall valuation impact of $250 M
Case Study: Large Revenue Cycle Mgmt Firm
THE GOAL: To help the client de-risk their outsourcing model, improve the cost characteristics of existing vendor relationship and establish a scalable delivery model for growth
APPROACH & OUTCOME:
Conducted a Portfolio Assessment to determine the mix of work going to the new partner vs the existing one. Conducted a sourcing process for selection of the right vendor partner who would give the best long-term rates and demonstrate the ability to grow as fast as the client.
Performed due diligence to confirm delivery quality. Provided negotiation and contracting support and set up the optimal contract governance structures for the two outsourcing relationships.
Second vendor partner selected with a target of 400 resources to be transitioned over two years, and growth thereafter. Savings of USD 11 M per annum. Client negotiated better rates and brought down the pricing of the existing vendor by 5%
Leading IT Consulting and Digital Solutions Vendor
THE GOAL: In order to improve its GTM strategy in North America , Client wanted insights into the current and future market trends and help in evaluating their current strategy, market offerings for IT and Business Services outsourcing, and guidance on how to improve their market position
Approach:
- Performed a current state assessment and interviewed stakeholders to identify the gaps in their strategy and market offerings
- Reviewed and compared their marketing materials, case studies, and standard responses to RFPs for each offering to best-in-class artefacts
- Analyzed the latest market trends especially from a perspective of a Client’s need to balance optimization while managing disruption
- Evaluated Client competitors in the market to identify opportunities for improvement
Outcomes:
- List of important attributes and benefits of their offerings; areas of improvement
- Actionable insights into the opportunities and its value proposition, customers and market segments to be targeted
- Guidelines on positioning the most appropriate solution based on client requirements
Related Reports
Contact Us
Anupam Govil
PARTNER, PRIVATE EQUITY PRACTICE
Rakesh Patro
PARTNER, PRIVATE EQUITY PRACTICE
Chirag Rawat
SENIOR DIRECTOR & LEAD, PRIVATE EQUITY PRACTICE