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Trend Report: Private Equity Outlook and Smarter Integration Planning

By Jill Harrison 09.01.20
This is part three in a series that addresses the technology trends the Private Equity industry is facing. Curious to read more? Here are parts one and two from the head of our Capital Markets practice.

Once internal productivity is under control, firms can shift their focus to ensuring that increased productivity isn’t challenged or hindered by disparate systems. The second major technology trend we are seeing with our Private Equity clients is smarter (and earlier!) integration planning. 

In May 2020, the Harvard Business Review (HBR) published a study introspecting the 2007 financial crisis. They found evidence that active acquirers outperformed the market — and made the case that “companies that made significant acquisitions during an economic downturn outperform those that did not.” HBR argues that “bargains will be had by those with the liquidity and the risk tolerance to move quickly, and who have done their homework in advance.” This follows for both financial and strategic acquirers.

Regardless of the financial performance of these investments in the long-term, PE firms face immediate challenges in their diligence processes related to technical integrations of their new portfolio acquisitions and add-ons. In our experience, there is growing demand from our global PE firms to assist with architecture roadmaps, program budget development and cost analysis, and high-speed execution of Salesforce-related initiatives to support new investments.

Collaborative Integration Planning

Over the past ten years, we’ve worked with many Private Equity firms to plan for and help realize the integration visions for their portfolios. Innovating digital operations across assets takes planning and a strong roadmap, especially when investment principals are trying to keep up with the changing operational needs of their portfolio. We’ve learned a lot of lessons from our best Private Equity clients, from integration budget planning to change management and everything in between. The bottom line is firms that have gotten in a lot of reps are well-positioned to succeed because of their strong execution muscles. 

In our experience, each new acquisition is an opportunity to rethink business models, retool business processes for efficiency and data capitalization, and leverage technology to serve the employee experience and realize greater post-deal synergy. Specifically, what we’ve been doing with our Private Equity clients to help bolster integration planning is four-fold:

  1. Partnering earlier in the diligence process to create technology integration budgets
  2. Integrating with virtual data rooms so that firms can pull key data forward into their integration programs
  3. Executing Salesforce & CRM org merge and migration projects for newly-acquired portfolio companies and their add-ons
  4. Delivering robust Training & Change Management programs to augment the employee experience for companies that have recently experienced shifts through M&A while soliciting great ideas for enhancement and innovation

Each of these tactics leads to greater line of sight into budgetary requirements and related costs, greater alignment across parties involved in the acquisition, faster speed to market for shared technology platforms across the newly-integrated organization, and greater return on investment as firms that follow this practice realize improved adoption and reporting. 

Because Silverline has seen first-hand the value and speed to market of this integration planning process, we have increased our investment in our Advisory Services practice to keep pace with demand from financial sponsors. We have developed a suite of lightweight roadmap and technical workshops that help firms plan for and realize their visions, and are excited to leverage our technical and industry expertise to continue delivering strategic value to our client partners.

Are you ready to leverage technology to help retool your processes and bolster integration planning? Get the full report to learn more about growing 2020 Private Equity trends.

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