With reduced leverage and acquisitions still commanding high prices, private equity firms need to reinvent their approach to earning attractive returns. Passive, hands-off stewardship is being replaced with a hands-on approach to creating value in the portfolio companies.
From our early days, Argo has been a leader in the active approach to value creation. We often find that the work we do immediately post-acquisition has the biggest impact. Owners and management have the momentum and desire to make a difference in the results. Those companies that wait under the belief that an “overqualified” management team with the right incentives is the answer often only find that isn’t enough to unlock all of the potential value – and end up forgoing many millions of value.
Our first post-acquisition task is to create an execution plan, identifying the full potential of the business and creating a detailed roadmap by workstream to capture the opportunity. Our analysis identifies the most promising near-term initiatives and longer-term potential and establishes an implementation timeline with milestones and accountabilities. Moving forward from there, we assign the resources needed to achieve the results and drive the transformation effort with robust operational and financial metrics to gauge performance.
Argo draws on a full range of industry and functional expertise acquired over more than 14 years as advisors to large and small companies around the world. We bring those capabilities to bear to help equity owners and management teams conduct a rigorous assessment of where their business has the best opportunities to increase its value and have proven success in helping capture it.