Creating value beyond the deal: private equity

Global deal value in 2018 reached the second highest level post the financial crisis, driven by robust global demand for assets by both private equity and corporate buyers. There has however been a decline in the volume of winning deals; those that create significant value relative to the purchase price.

We surveyed 100 private equity partners globally and asked about their experiences with value creation to understand how they realise maximum value in their deals. We uncovered that whilst investment capacity at private equity is at an all-time high, cost-cutting is no longer enough to drive returns in today's tough market environment.

What if you looked at your M&A differently?

Get involved in the conversation: #BeyondTheDeal

Revenue growth

55% of private equity deals don't lead to revenue growth.

Strategic clarity

80% of deals that utilised a formalised approach to creating deal value delivered material returns.

Culture

57% of private equity dealmakers said cultural issues hampered value creation.

Exit strategies

91% of the dealmakers who say their divestment created value ran their exit process according to a more formalised methodology.

Preparing for the sale of an investment at an early stage forces the sellers and the management teams to assess a business with potential buyers in mind. This is of particular importance in order to take advantage of deal opportunities in private equity.

Dr. Marc Schmidli, Partner - Deals and Valuation Leader, PwC Switzerland

Reducing costs is one area private equity investors typically pursue in a disciplined way. But in today’s markets, extracting cost synergies is not enough. Too few private equity investors (45%) realise revenue synergies.

Dr. Claude Fuhrer, Partner - Value Creation in Deals Leader, PwC Switzerland

Plan early and track rigorously

50% of respondents cited putting value creation at the heart of the deal as the key lesson for future deals, closely followed by better communication with stakeholders. Ensuring strategic clarity from the outset, which is supported by a comprehensive value creation blueprint, has enabled the Private Equity dealmakers in our survey to enhance value from their acquisition.

Contact us

Marc Schmidli

Marc Schmidli

Partner, Deals and Valuations Leader, PwC Switzerland

Tel: +41 58 792 15 64

Claude Fuhrer

Claude Fuhrer

Partner, Deals Strategy & Operations Leader, PwC Switzerland

Tel: +41 58 792 14 23

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