Maine Pointe expands operational due diligence offering for private equity

30 January 2020 3 min. read

Global supply chain and operations consultancy Maine Pointe has expanded its operational due diligence offering for private equity (PE) clients.

As the PE market continues to be red hot, some investment are falling short of financial and operational targets – signifying a potential deficit of due diligence.

“Operational due diligence is perhaps the most important aspect of value creation for PE companies,” said Mark McTigue, EVP of private equity for North America at Maine Pointe. “PE firms have always been attentive to due diligence, but now with merger and acquisition activity at an all-time high and valuation multiples at their highest, PE firms are doubling down to ensure they are making the best decisions and identifying each deal’s full potential.”

To help PE firms better realize value, the consulting firm has expanded its TVO operational due diligence offering with a dedicated team. TVO (Total Value Optimization) is the firm’s methodology which aligns the buy-make-move-fulfill supply chain to deliver the greatest value to customers and other stakeholders at the lowest cost.

Maine Pointe expands operational due diligence offering for PE firms

The dedicated team will be headed by McTigue, and will include Doug Radtke, diligence and analysis director; Joe Esteves, VP, private equity, North America; and Jamie Loder, VP, private equity, Europe.

The operational due diligence team will help PE clients identify risks and opportunities in the end-to-end supply chain and operations, and then create an actionable roadmap for operational improvement.

With the supply chain (procurement, logistics, and operations) accounting for 80% of a company’s cost base, there are huge opportunities for optimization, especially if advanced data analytics methods are used.

“Successful due diligence depends on leveraging a target’s data and it requires industry expertise to use the data to identify revenue enhancement and cost savings opportunities,” said McTigue. “This improves PE credit committee confidence in valuation before the transaction closes and provides for better execution on the value thesis.”

Maine Pointe says its operational engagements typically deliver between 4:1 to 8:1 return-on-investment. On the upper end, the firm says one PE client’s portfolio company achieved a 60:1 ROI at exit in less than a year. The consultancy reports that it has realized billions of dollars in benefits for more than 50 PE firms in 30 countries thus far.

The team’s approach includes pre-acquisition diligence, post-acquisition integration, and value-capture implementations. Post-acquisition, the consultancy works to align organizational functions to deliver “quick wins” in less than three months, optimizing procurement, logistics, and operations.

Founded in 2004 and based in Boston, Maine Pointe has approximately 200 professionals across offices in the US, Canada, Switzerland, and China. The consultancy was acquired last year by SGS, a Geneva-based multinational inspection, verification, testing, and certification company.