From time to time, a senior member of the executive team needs to be refreshed. Many factors impact the success, or not, of the original investment such as exiting on time and at the right exit value. Furthermore, hitting the ongoing targets and performance milestones are vital to achieving a successful exit for the investors.
Hiring a new executive isn’t without risk so it’s important that the right skill set, personal qualities, and calibre of individuals are hired. If a secondary buy out is the most likely exit for the shareholders, then recruiting a strong “B” team is essential as it is this team that a future investor will back in an MBO. Hiring the exact right person will impact time scale and enterprise value.
Hiring the right person will have a significant impact on business performance. Senior hires will impact the timing of the exit, the internal rate of return and can influence the enterprise value by millions of pounds. G&E Partners have many years’ experience of what works within a Private Equity portfolio company. We work with chair people, investment directors and CEOs to help shape and clarify the candidate profile. Enlightened businesses fully appreciate that the calibre of people employed will significantly impact a business positively or negatively.
Big unforeseen global events such as the credit crunch can result in the window to exit closing, sometimes for many years, be it within trade, secondary and especially IPO.
Exit delays can impact your ability to close a fund and therefore establish another as investors may lose confidence.
Enterprise value or internal rate of return may be reduced.
Missing exit times scales can result in a reputational loss.
It’s a fact that a pivotal role is a private equity portfolio companies is not for everyone. Some people cannot adapt, don’t fit the pace of business, don’t understand the CAPEX policy, and cannot cope with the pressure of achieving deadlines and results.
Through careful research and in-depth liaising with your company, we aim to build a strong understanding of your business model. At G&E Partners, we hold a proven record of accomplishment and success in sourcing the right people, for the right role. Within our delivery team, we have practical experience of a private equity transaction. In 1998, 3i invested in Ellis Fairbank plc – they took up an option to acquire more shares in 1999 and they exited in 2001 through a secondary buy-out led by two divisional Managing Directors and the Finance Director.
Business valued by its private equity owner in 2001 at £70M.
Over the next 8 years several key appointments were made through Terry Ellis, Director of G & E Partners:
UK & Ireland Managing Director
UK Sales Director
Research & Development Director
European Sales Director
The business was subsequently sold in 2005 for a reported £225M and again in 2008 for a reported £514M.
Private Equity Owned – Sub £20M t/o
Worked with the Chairman to re-build the management of a manufacturing organisation which provided products into the healthcare sector. Mainly UK, but also USA, Germany and via distributors to other European destinations.
MBO – SUB £20M Private Equity
£10M turn over – the business had strayed from its budgeted performance, G & E Partners were retained to identify a new CEO.
Terry helped profile key skills required given the businesses key problem was the top line, also found a new CFO to complete the team re- fresh.