Wilson Perumal

Operations: The Missing Link in Private Equity Due Diligence

Written by Wilson Perumal | 5/14/20 4:03 AM

Discovering operational improvement potential prior to acquisition minimizes acquisition risk and maximizes return on investment. With early identification, EBITDA gains of 20–40% can be captured in less than 12 months.

Including a deliberate and structured operations assessment during the due diligence process provides the deal team with new insights into value potential. With deep real-world operations experience and truly unique methods, Wilson Perumal & Company helps deal teams identify real, actionable short- and long-term potential. Once closed, our team is ready to drive this value realization through implementation support.

 

Our diligence approach brings together multiple perspectives to identify risks and focus on value creation. One of these unique views is provided by our Square Root Costing (SRC) methodology, which quickly uncovers true profitability of products & customers. Backed by CFOs and academia, SRC is a proprietary methodology we use to quickly account for the cross-subsidization of overhead costs, the non-linear relationship between cost and volume, and the impact of variety on a business.

In a matter of weeks, we can provide clarity on which segments of the customer and product portfolio are profitable and scalable and which are not. This provides differentiated input into valuation and then value realization by highlighting hidden, but practical opportunities to remove costs and better focus investment (time, people, equipment, cash).