Private Equity

“IT’S NOT ABOUT THE BOTTOM LINE, IT’S ABOUT CREATING SOMETHING OF REAL VALUE.”

Problem

The last decade marked an unprecedented success for private equity, with more money being raised, invested, and distributed back to investors than in any period in the industry’s history.

Success draws intense competition, which has produced several challenges for PE deal makers, such as high deal multiples, a dearth of attractive targets, and stiff competition from corporate buyers.

In this highly competitive environment, the best returns are achieved by GPs that focus on both due diligence when evaluating platform/add-on acquisitions and on value creation, working closely with their portfolio companies.

Solution

Sapling works closely with PE firms to offer due diligence services in the form of (a) QoE Reports and (b) data ‘slice and dice’ for private M&A situations, and (c) financial modelling of new investments, and follow-on financing deals. Our due diligence services are offered with quick-turnaround and priced affordably for the lower-middle market.

Sapling also assists in value creation at the portfolio company level. Finding the best team to deliver against a value creation plan is always challenging for PE firms.

We assist GPs with mission critical projects in the post-close process, working on key Finance projects, covering data analytics (Power BI dashboarding, data warehousing, KPI formulation, customer lifetime value analysis), custom-tool development (internal financial models, pricing tools, scheduling tools, etc.), and automation of repetitive tasks.

We create processes, systems and tools that can be used by the Finance team on an ongoing basis, or that can be updated continuously by our consultants, depending on the client’s preference.

Due Diligence Services
(Pre-Deal)

Quality of Earnings

Diagnostic Review of Revenues and Costs
Profit & Cashflow Transparency with High-level Normalization Adjustments
Analysis of Forecasts, Trends and Seasonality
Working Capital and Capex Analysis
Reconciliation against Cash, Tax Returns, etc.
Observations on Historical Performance
Factors Driving Business Sustainability
Major Risks and Red Flags
Sensitivity and Scenario Analysis

Buy/Sell-Side Data Analytics

Slice and dice information as needed to demonstrate growth and sustainability trends concerning sales transactions, working capital, EBITDA, etc.
Calculate sales by customer, customer lifetime value, average basket size, etc.
Harmonize multiple historical data sets into a single “data cube”

Financial Modelling

Credible and bankable financial models to provide analysis on forecasted financial performance
Sensitivity analysis on key drivers – sales, margins, capital structure/stack
Third-party, un-biased view

Value Creation Services
(Post-Deal)

Data Analytics

Implementation of BI Systems (Back-end and Front-end)
Dashboard Setup and Automation
Financial & Operational KPI Reporting
Client Segmentation & Lifetime Value Analysis
Client/Location/Product Profitability
Set up of data warehouse
Integration with existing systems – API calls, integrator implementation, web scraping, etc.