Expertise|Private Equity

Overview

Stax has more than two decades of experience supporting private equity firms in intensive, short-term diligence efforts that impact investment decisions. Stax also has extensive experience helping private equity firms maximize the value of their portfolio companies by developing growth strategies, identifying opportunities for operational efficiency, and assessing follow-on M&A opportunities. Stax has reviewed well over 2,000 transactions across industries and investment strategy, which means there is a good chance Stax has looked at a target or competitor in the past, and have relevant expertise.

Due Diligence

Over the last 20 years, Stax has built a process to deliver commercial due diligence engagements with speed, transparency, focus, and collaborative skills necessary to provide the right assistance in a deadline-driven deal situation. Stax provides Deal TriageTM early in the process and full-blown commercial due diligence teams when investors are committed to pursuing a target. These teams assess the market position of the target company and pressure test key issues and management projections for growth. Our calling card is having industry knowledge to advise what to ask about, and experience gathering information from a variety of sources, including substantive primary research. We also bring content and facts to bear to generate a substantive fact base and insights for the specific deal, and are a thought partner in the M&A process.

Portfolio Operations Support

Stax works with many of the leading portfolio operations teams in the world, providing substantive leverage through data-driven insights and actionable advice, particularly developing strategies to drive short- and mid-term revenue and profit growth, and helping create value from the day of deal close through exit. Portfolio company executives, who are often former consultants or operators, appreciate Stax’s combination of research and analytic capabilities, flexible case teams, and action orientation.

Types of Engagements

  • Commercial due diligence.
  • M&A screens.
  • Identifying and prioritizing organic growth opportunities.
  • Intensive data-driven deep dives on sectors and industries, customer segments, geographic markets, and competitors.
  • Go-to-market strategies.
  • Understanding profitability beneath the averages, how resources (like sales and marketing) are allocated, the returns on operational investments, and developing strategies to optimize returns.
  • Planning for exits.

Areas of Expertise

  • Strategic Acquisitions
  • Growth Equity
  • Leveraged Buyouts
  • Distressed Debt
  • Value Creation for Portfolio Companies

Examples of Engagements

  • Due Diligence of EdTech Company. A private equity client asked Stax to advise them on the achievable market size and competitive strength of a target company that provides specialized technology for the education sector. Stax complemented comprehensive secondary research with over 100 interviews—of industry experts and educational institutions—to understand current and expected adoption of the technology produced by the target company. As a result of this research, Stax advised the private equity client to make the investment, as the target company appeared well positioned in a growing market. Further, Stax mapped growth opportunities for the company.

  • Portfolio Company Growth Strategy and Value Maximizing. The portfolio company of a private equity firm—a global agriculture equipment manufacturer—engaged Stax to conduct a bottom-up assessment of markets in North America, Latin America, Eastern Europe, and Asia. Based on this assessment, which included secondary research along with interviews, the client decided which markets to focus on for the short, mid, and long term. Stax also used the information gathered, as well as information about the client’s capabilities, to develop a five-year growth strategy for this company. This strategy was actionable at the C-level for long-term initiatives and by the sales force in the short term.

  • Revisiting Investment Thesis Due to Changing Circumstances. Stax was engaged to assess what impact, if any, a mid-auction labor strike had on a target company’s current market position. The client used Stax’s findings to ascertain how sales and orders had been impacted, determine what impact the strike had on the company’s relationship with its distributors and end users, and understand whether the strike would have any lasting impact on the business. Stax found there had not been significant change in market share due to the strike. Based on these findings the client proceeded to invest.

SEE MORE CASE STUDIES

With two decades of experience across varied sub-sectors and geographies, Stax understands the type of information that private equity firms need to make more informed investment decisions, and the kind of strategic assistance portfolio companies need to increase their value.

To discuss how Stax can assist you contact Mark Bremer at mbremer@stax.com.

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