Financial Sector

PRIVATE EQUITY & INVESTMENTS

What challenge(s) do our clients face?

To deliver sustainable and healthy returns PE firms must become successful operating partners for their portfolio companies

High entry multiples and competition for assets is putting pressure on private equity companies to continue to deliver top quartile returns. Firms can no longer rely purely on financial engineering to enhance portfolio value and instead must become more innovative through operational improvements.

The greatest challenge that PE managers face today, therefore, is to become successful operating partners for their portfolio companies, actively supporting them to deliver significant and sustainable value and deliver the expected returns.  It is not enough anymore to only bring-in an experienced management team and rely on senior experts on the board.

True operating partners must be engaged across the entire life-cycle of the deal, guaranteeing that the due diligence clearly identifies the main drivers of value-creation, collaborating with management teams to guide the business through the growth cycle, and truly understanding and focusing on the human element of the business.  The working culture of a company, with an engaged, enthusiastic and incentivized team in the right organizational design is critical to success.

How do we help?

Integration has supported several private equity managers in this challenge of becoming a better operating partner.  Our functional expertise, coupled with our hands-on, collaborative and pragmatic approach enables us to help these clients with different investment theses and throughout the investment cycle.

As this has become the main source of value creation for PE firms, Integration can help clients to improve performance and generate value in portfolio companies through a different array of initiatives that have the potential to accelerate growth, increase margins, bring cost and expenses efficiency and/or release working capital. Growth Strategy & Operational Value Increase Buying a good company that is struggling and with a poor balance sheet can be a good way to generate higher returns. However, a successful restructuring process is far from easy to execute. Integration can help clients to effectively assess the reasons behind the company’s struggle, develop an adequate strategy to turnaround the business, plan and prepare the implementation of this strategy, keep track of the execution whilst managing the change and change course along the way as required. Turnarounds While Buy and Build is an attractive investment strategy that can significantly increase investor returns, it is challenging to build this acquisition capability in a platform company; integrating one or more add-on companies, growing the business and achieving economies of scale all without negatively impacting existing operations. Integration can help PE firms to craft its buy & build strategy in a specific sector, assess the capability of a company to be used as a platform, establish an M&A/PMI team within the company and train and build the necessary management skills for execution. Buy & Build / Consolidation A carve-out can present unique opportunities that are different from when making typical acquisitions. However, they are complicated to execute and full of traps. Integration can help PE firms to define in detail what will and will not carved-out, fully understand and allocate costs and value, negotiate the transition service agreement and plan and prepare for day one. Carve-Outs & Divestitures Alliances, if done well, can be an important alternative to both the organic and inorganic growth of a portfolio company. Nevertheless, there are risks involved, and the need for trust and collaboration can make them far more delicate to navigate than traditional M&A transactions. Integration can help our clients to evaluate the benefits and risks of a potential alliance, define clear boundaries amongst the parties involved, establish the rules of engagement and plan and prepare for the implementation. Alliances & Joint-Ventures EVALUATING THE INVESTMENT
As this has become the main source of value creation for PE firms, Integration can help clients to improve performance and generate value in portfolio companies through a different array of initiatives that have the potential to accelerate growth, increase margins, bring cost and expenses efficiency and/or release working capital. Growth Strategy & Operational Value Increase Buying a good company that is struggling and with a poor balance sheet can be a good way to generate higher returns. However, a successful restructuring process is far from easy to execute. Integration can help clients to effectively assess the reasons behind the company’s struggle, develop an adequate strategy to turnaround the business, plan and prepare the implementation of this strategy, keep track of the execution whilst managing the change and change course along the way as required. Turnarounds While Buy and Build is an attractive investment strategy that can significantly increase investor returns, it is challenging to build this acquisition capability in a platform company; integrating one or more add-on companies, growing the business and achieving economies of scale all without negatively impacting existing operations. Integration can help PE firms to craft its buy & build strategy in a specific sector, assess the capability of a company to be used as a platform, establish an M&A/PMI team within the company and train and build the necessary management skills for execution. Buy & Build / Consolidation A carve-out can present unique opportunities that are different from when making typical acquisitions. However, they are complicated to execute and full of traps. Integration can help PE firms to define in detail what will and will not carved-out, fully understand and allocate costs and value, negotiate the transition service agreement and plan and prepare for day one. Carve-Outs & Divestitures Alliances, if done well, can be an important alternative to both the organic and inorganic growth of a portfolio company. Nevertheless, there are risks involved, and the need for trust and collaboration can make them far more delicate to navigate than traditional M&A transactions. Integration can help our clients to evaluate the benefits and risks of a potential alliance, define clear boundaries amongst the parties involved, establish the rules of engagement and plan and prepare for the implementation. Alliances & Joint-Ventures EVALUATING THE INVESTMENT THESIS
OUR SERVICES We help our clients to craft and/or confirm their investment thesis and understand how to make money from a deal by focusing on the main levers that determine its success. We combine our market scan methodology, data analytics, field work interviews with customers and supplier value chain mapping to bring a complete perspective on the deal. Our approach to strategic, commercial and operational due-diligence combines analytical rigor, independence and deep industry expertise. We help our clients understand the key value generating levers of a target company, identify the main operational bottlenecks, assess potential risks and evaluate opportunities that can be captured in the short and mid-term. This provides a clear estimation of projected returns and a clear post-acquisition agenda. Our approach aims to guarantee an effective takeover and subsequent integration of the company into the PE manager portfolio. This ensures business continuity, talent retention, efficiency gains and tackling of the main opportunities, bottlenecks and risks identified during the due-diligence. This is done through careful planning and preparation ahead of the “D-Day” with the development of a detailed action plan for the first 100 days post-closing. We help our clients to boost performance and generate value in portfolio companies through an array of different initiatives that have the potential to increase revenue, bring cost efficiency and/or release working capital. Our services range from Market Scan, Revenue Management and Design of a Go-to-Market Strategy to Sales & Operational Planning, Strategic Sourcing and Zero Based Budgeting. We help our clients to understand the buying landscape, evaluate potential exit alternatives, define their preferred route and guarantee adequate planning, preparation and execution either for auctions or an initial public offering (IPO). Investment Thesis Due Diligence & Valuation Portfolio Integration (PMI) Value Creation DIVESTMENT INVESTMENT PHASE PORTFOLIO MANAGEMENT
OUR SERVICES We help our clients to craft and/or confirm their investment thesis and understand how to make money from a deal by focusing on the main levers that determine its success. We combine our market scan methodology, data analytics, field work interviews with customers and supplier value chain mapping to bring a complete perspective on the deal. Our approach to strategic, commercial and operational due-diligence combines analytical rigor, independence and deep industry expertise. We help our clients understand the key value generating levers of a target company, identify the main operational bottlenecks, assess potential risks and evaluate opportunities that can be captured in the short and mid-term. This provides a clear estimation of projected returns and a clear post-acquisition agenda. Our approach aims to guarantee an effective takeover and subsequent integration of the company into the PE manager portfolio. This ensures business continuity, talent retention, efficiency gains and tackling of the main opportunities, bottlenecks and risks identified during the due-diligence. This is done through careful planning and preparation ahead of the “D-Day” with the development of a detailed action plan for the first 100 days post-closing. We help our clients to boost performance and generate value in portfolio companies through an array of different initiatives that have the potential to increase revenue, bring cost efficiency and/or release working capital. Our services range from Market Scan, Revenue Management and Design of a Go-to-Market Strategy to Sales & Operational Planning, Strategic Sourcing and Zero Based Budgeting. We help our clients to understand the buying landscape, evaluate potential exit alternatives, define their preferred route and guarantee adequate planning, preparation and execution either for auctions or an initial public offering (IPO). Investment Thesis Due Diligence & Valuation Portfolio Integration (PMI) Value Creation DIVESTMENT INVESTMENT PHASE PORTFOLIO MANAGEMENT

Clients

We have worked with clients in different categories, geographies and positions along the value chain:

WATCH TESTIMONIAL

In this video, a range of clients from the Private Equity sector talk about their positive experience working with Integration.  


Private Equity & Investments: What our Clients Say Private Equity & Investments: What our Clients Say

SUCCESS STORIES

CHALLENGE

Integration was asked to help a private equity client with the carve-out of an international fast food delivery franchiser, ensuring that it could operate as a stand-alone entity immediately after the separation.

Our client requested our support with every element of the carve-out from: analyzing and mapping key-processes, positions and professionals through to preparing tailor-made communications (internal and external) which would guarantee readiness and calm for staff and minimize market movements.

APPROACH

To guarantee the smooth transition period Integration undertook a variety of activities such as:

  • We interviewed 40+ professionals and documented the main elements for business continuity, including organizational structure, key processes, positions and professionals.
  • We evaluated and created different scenarios for “taking control”, depending on the uncertainty of closing procedures, guaranteeing adherence to reality and flexibility of the team to react quickly and precisely within project definitions
  • We guaranteed knowledge transfer to the new leadership and supported them in this initial period, by bringing visibility of daily business and project activities.
  • We designed and implemented change management activities to welcome new professionals. Strong communication efforts were used to motivate individuals, teams and the whole stand-alone company.
  • We completed a map of key positions and hires alongside a detailed recruitment plan for the HR area.

RESULT

The office move and relocation was completed in less than one week with no delays.

The company was prepared for its stand-alone operation after closing and the leaders took ownership of their roles and implemented the governance from Day One. Our hypercare support for leadership guaranteed that all issues were addressed in an efficient way without impacting the daily business​.

Efficient internal and external communications almost ensured that there was no impact on franchisees, guaranteeing alignment and motivation for the internal team. ​

CHALLENGE

Integration was hired by a private equity manager to carry out a scan of the plastic pipes (PVC and HDPE) market in Mexico.

The client had an investment thesis on a top player within the industry and wanted to validate market numbers (size, growth forecast and drivers, segmentation, market shares, channel and product margins etc.) and hear Integration’s point of view about market attractiveness and growth paths for the company they were evaluating.

APPROACH

We developed both a top-down and bottom-up  market sizing broken down into product, sectors, regions and exports; understanding market forecast by product and end user industry, competitive landscape competitors manufacturing and logistics footprint and growth avenues, detailing the expected growth for the client’s target company from its core business expansion, as well as for new products/markets.

RESULT

The project confirmed the PE’s investment thesis and provided very valuable information to design the growth avenue strategy, financing strategy and the 100-day post acquisition plan.

We were invited to present the project to the first investors round tables adding confidence in the market evolution determination.

CHALLENGE

A leading toy retailer acquired its biggest competitor, creating a joint network of more than 170 stores.

This acquisition came shortly after the retailer’s sale to a private equity fund.

The challenge was to go through the implementation process and the significant changes that it brought whilst maintaining business activities and value. Specifically, Integration provided support to:

  • Integrate the new senior management team
  • Define the organizational redesign of the company
  • Retain talent among professionals
  • Ensure employees of both companies were working together
  • Structure and conduct communication and training programs whilst managing stakeholders throughout the process

APPROACH

Integration supported in 4 main aspects:

  1. Definition of the integration strategy for each area, ensuring clarity for each leader and their team.
  2. Fostering active participation among company leaders with PMO support to make their decision-making process more efficient for a successful DAY ONE Implementation.
  3. Communication and constant alignment with the project team and the executive committee whilst organizing DAY ONE.
  4. Implementation of change management strategies to integrate professionals into one single office for working efficiently together from DAY ONE.

RESULT

  • Professionals from both companies worked together in the same office for the first time with great results.
  • The planning and execution of DAY ONE happened successfully.
  • There was efficient internal communication, strong engagement and high awareness of the milestones taking place between the two companies.
  • Changes in the organizational structure were implemented with respect and no issues.
  • The new senior management team were integrated effectively.

CHALLENGE

A private equity firm made a significant investment to consolidate the education sector in Brazil, building one of the largest education companies in the world with more than 1.5 million undergraduate students.  The company was searching for new ways to relate to its student base and reduce the cost and complexity of operating a model based on physical presence.

APPROACH

Integration understood the student journey, segmented the different services models and considered opportunities for centralization and automatization through the use of new technologies such as BOT´s, online tools, artificial intelligence and predictive analysis.

RESULT

The project was recognized for delivering an increase in service level, high engagement from the different areas of the company and has driven more than U$20 MM in savings.

CHALLENGE

An asset management firm grew rapidly through third party investment and the acquisition of new credit portfolios, which differed from their base business. As the organization entered a moment of transition in terms of management model and business characteristics,  it needed to ensure greater control of the operation, which had typically run on undocumented, implicit knowledge. The goal was to prepare the business for growth in a sustainable way.

APPROACH

We carried out a diagnosis of the 11 areas and 96 processes of the organization and identified 16 priority processes in core areas. We worked with a multifunctional team inside the client to redesign priority processes through a series of workshops, simultaneously mapping out the key factors required to implement them. Once the processes were finalized, we prepared a full roadmap of activities to implement and solidify the new way of working, involving professionals across the organizational pyramid.

RESULT

With the implementation of the priority processes, the company gained productivity particularly through the front office areas, which allowed them to grow 2,5 times in AUM in 3 years without an increase in hiring.

TALK TO US

Alejandro Martinez

Alejandro is a Managing Partner in our Mexico operation. Alejandro has spent over 20 years within consulting, as well as within Industry, having been factory manager and chief of production for Kimberly-Clark. He has worked extensively across Mexico, Latin America and the United States developing deep experience in Consumer goods, Retail, Manufacturing, M&A and particularly [...]

Augusto Ribeiro

Augusto Ribeiro is a Managing Partner at Integration and has been working since 2003 in the Marketing & Sales practice. Augusto built a solid international experience, leading and implementing strategic Marketing & Sales projects in industries ranging from Consumer Goods through Construction & Property Development to the Financial Industry, especially in the Private Equity sector.

Carlos Lima

Carlos is the President of Integration and a Founding Partner. Carlos has worked with leading international companies across the globe as a consultant for the last 30 years and has developed a particular specialization in Marketing and Sales. He is considered an expert in the Consumer Goods sector and on the topics of Commercial and [...]

Carolina Flores

Since 2010 Carolina has been working in our Finance & Management practice, helping our clients across industries achieve important transformations. She has often been involved in projects of large and international scale supporting organizations to achieve their financial objectives through efficiency programmes, Organizational Structure changes, Synergy Evaluation and PMI to name a few.

Gerard Schoor

Gerard is a Managing Partner and has overseen the Mexico City office since 2008. Prior to Integration, Gerard accumulated 25 years of experience in executive positions at L’Oréal, The Colomer Group and Unilever in Europe, USA and Latin America. He has led global projects related to Organizational Development, Market Entry Strategies, Industrial Management and Strategic [...]

Gilberto Sarian

Gilberto is a founding Partner at Integration. Over the course of more than 25 years he has led the development of Integration`s award-winning Supply Chain practice, advising international clients across Latin America, Europe and USA. With a background in Engineering, he frequently participates in events and lectures across the world, to discuss latest trends and [...]

Hugo Ribeiro

Hugo is a Founding Partner at Integration and can count on more than 30 years of experience in consulting. Hugo, who holds a post-graduate degree in Business Administration from Harvard University, is a senior specialist in the area of Finance & Management and frequently leads projects in Organizational Structure, Strategic Planning, M&A, Improvement of Productivity, [...]

Jorge Gomes

Jorge is a highly experienced professional in our Finance & Management practice having joined Integration in 2008. Jorge has travelled to countries around the world in support of our clients, leading projects related to revenue management, strategic planning, M&A and more. He has a well-rounded experience having completed multiple projects for clients across sectors including [...]

Lucas Tavolaro

Lucas joined Integration in 2011 and found his home in our Finance & Management practice. He has supported our clients in the creation Strategic Roadmaps, M&A synergy evaluations, Go-to-Market strategies, Cost Efficiency and Strategic Sourcing projects. His experience includes sectors such as Consumer Goods, Construction & Property Development, Education, Private Equity, Oil & Gas, and [...]

Quentin Girard

Since 2013 Quentin has worked in our London and São Paulo offices specializing in Finance & Management projects. He has led engagements across a wide array of countries in Europe, South America and Central Asia. His primary experience includes projects related to Route to Market, Cost Efficiency, Cost-to-Serve and Strategic Roadmap Design, in sectors such [...]