With fierce competition for prime assets and a flurry of Middle Market PE deals that put 2018 on pace for a record year1, both buyers and sellers are looking for any advantage. While the typical due diligence playbook includes financial, IT, employee, customer and market assessments, it ignores pricing analyses. Yet pricing diligence provides a unique advantage as it analyzes the strongest profit and value creation lever in any business…the power of pricing.
Commercial diligence nor Quality of Earnings analysis cover the topic of pricing in the depth it deserves given its ability to accelerate and sustain top-line growth. Why? Because few companies have the expertise and the tools to exploit the power of data and analytics to inform their decisions during the transaction process.
Pricing analysis shines light onto areas of margin improvement opportunity that others don’t see.
- Maximize the data room and exploit data analytics to see opportunities others don’t see related to pricing and far beyond pricing
- Accelerate time to insights by leveraging proprietary technology and unparalleled pricing expertise to uncover and quantify hidden EBITDA improvement areas in days – not weeks or months
- Identify – through in-depth analytics – specific risks and margin improvement opportunities which become the basis of your 100-day plan post-acquisition. Consider analytics such as (but not limited to) Price Differentiation, Margin Leaks, Price Outliers, Customer Churn, Low Price Realization, and Cross Selling.
- Showcase pricing power within the business and willingness to embrace data analytics to detect value creation opportunities
- Highlight and quantify margin improvement opportunities to capture value in sale process
- Demonstrate organizational awareness of and commitment to realizing existing margin improvement opportunities
The Bottom Line
Make the power of price part of your firm’s toolkit and pricing analyses part of your due diligence – on both the Buy and Sell Side of the transaction process. Through unparalleled pricing expertise and proprietary data analytics technology, we uncover EBITDA growth and enterprise value creation opportunities. We then deliver actionable insights and a quantified margin improvement roadmap in an accelerated time-frame to suit tight due diligence timelines.
1 3Q 2018 PitchBook US PE Middle Market.