Private Equity

Compressed deal timelines can sometimes mean that pre-deal Due Diligence gets rushed or its findings completely ignored. This only increases the investment risk of the acquisition. Due to poor pre-deal Due Diligence, many companies experience significant Value Destruction post acquisition.

Here are three examples:

Cyber Security Cataclysm

A High Street Retailer completed its ownership transfer from a leading PE fund to a Creditor Consortia then only to suffer a phishing attack from a ransomware gang. The attackers gained admin rights, spread laterally through the network and exfiltrated 100s of gigabytes of data before encrypting systems. The Retailer eventually negotiated the ransom down to $2M; which they ended up paying.

Data Integration Disaster

A PE Fund acquired a Consumer Products company with the promise of leveraging "rich customer data" for cross-selling opportunities. However, post-acquisition analysis revealed that customer data is spread across 15 different, unconnected legacy systems.

The cost to integrate and cleanse the data exceeded $2.5M, and the project took 18 months instead of the projected 6 months, delaying all planned revenue synergies and reducing projected IRR by 3-4%.

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Tech Debt Talent Flight

A PE Fund acquired a promising SaaS company for its strong commercial metrics but failed to assess the Technical Debt burden during due diligence. Within 6 months post-acquisition, 40% of the engineering team left due to frustration with legacy code quality and outdated development practices. Replacing senior technical talent costs $150K per developer and delayed the product roadmap by 12-18 months.

The Noremo team are all seasoned Tech professionals, most with over 25 years of experience across a broad range of technologies and industries. They have their antennae raised, questions primed and AI tools tuned to identify Tech Risks during Tech DD. Thus any outsized Tech Risks that get uncovered can get mitigated (potentially at the seller's cost) during the first 100 days post acquisition.

During Tech DD we also keep our eyes open for hidden nuggets of value, that with the right nurturing could turn into your key Value Creation opportunities post-acquisition.

Read on to understand how we can help accelerate Value Creation at your Portfolio Companies.

Growth Companies

We work with Growth Company business leaders to supercharge their Value Creation initiatives.

Sometimes, a PE firm will come with its playbook and a Buy & Build strategy to roll up a number of players in a fragmented industry and lead with a top-down approach.

More often, inside the Growth Company key people will already have their own ideas for driving revenue growth (via, for example, better customer engagement) and operational efficiencies (via, for example, more automation in your back-office order management processes). However, communicating with the urgency, focus and language that PE investors demand is sometimes challenging.

Working with Growth Company business leaders, Noremo will, in the first 100 days post-acquisition, help you to:

Mitigate any outsized Tech Risks and raise your Value Destruction anchors
Craft and prioritise a Tech Roadmap to support your first year Value Creation initiatives
Prioritise and cost key programs
Launch RFP processes with multiple suppliers
Interview candidates for key roles
Kick-off priority initiatives

Noremo is here to support you on your Scaleup to Exit journey.

Tech Risk Mitigation Plan

Identify Tech risks, assess likelihood and impact, prioritise risks and describe measures to address or mitigate

Value Creation Plan

Provide Tech input to the business’s overall plan for driving revenue growth and operational efficiencies

Tech Roadmap

Create a prioritised, sequenced Tech Roadmap to meet business needs, budget and achievable timelines

Outcomes

Here are some of the outcomes we can help you achieve:

Align Commercial, Marketing, Technology and Operational strategies to grow EBITDA

Transform your stance on Digital, AI, Data and Cyber Security

Focus the go-to-market strategy based on data

Grow customer trust, reduce churn and and earn more repeat business

Build, launch and adapt new and existing Products faster in a changing market

Leverage Data and AI to deliver better Products and faster Service

Create a prioritised roadmap of Tech initiatives and delivery programmes

Adopt resilient, scalable Architectures that support future business needs

Avoid Cloud Computing and SaaS software costs spiralling out of control

Create and run the best Target Operating model for your business

Avoid the cost, brand damage and business disruption due to insufficient preparation for Cyber attack

Buy & Build - Product & Tech Due Diligence and M&A support

Many of these are initiatives that Growth Companies are already planning (or even doing!). For Growth Company business leaders, success will come from communicating better with your company owners' in their language (financial returns!) and with an urgency that they understand.Please read on to learn how we can shift the timeline left for your Private Equity investors.