Rethink today.
Reinvent tomorrow.
A value creation mindset goes a long way in enhancing enterprise value
Empirical data shows that a majority of transactions struggle to create value. As businesses around the world continue to adapt to unprecedented challenges, the need for a programmatic approach with a Value Creation mindset is even more important.
But in pursuing a transaction, which levers of the value creation process should you pull to achieve long-term sustained outcomes? Does the transaction align with your strategic goals? Is the business at optimal productivity and capacity? How can you increase returns by improving your inventory turns? Does the business have spare, non-core assets that can be used elsewhere or divested? How can you accelerate the top line? How can you improve the efficiency to deliver the top line at higher EBITDA margins? What are the synergies and dis-synergies of the transaction?
Businesses grapple with these questions -- whether they are targeting an acquisition -- considering a divestiture -- or looking to improve their performance.
Situations where PwC’s Value Creation team can assist
Deal situations
Seeking inorganic growth – buy side
Divesting businesses – sell side
Fundraising or IPOs – sell side
Unlocking value in undervalued businesses – buy and sell side
Deal situations
Low profitability – slower growth and/ or higher costs
Low RoIC – lower profitability and/ or excessive asset base
Low valuations – business under performance and/ or investor perception
Explore a broader perspective
Our diverse team of experts help you to programmatically adopt new approaches to value creation strategies - from making your business more resilient to bolstering sustainable performance. Bringing our expertise in operations and finance, as well as in deals and strategy, we look holistically at all aspects of an organisation’s performance to propose enterprise-wide transformation initiatives or smaller scale optimisation programmes.
- Performance improvement (PI)
- Operational due diligence (ODD)
- Investment readiness
Performance improvement (PI)
Companies adapting to an ever-changing world are looking to grow their businesses and capabilities, fueling M&A activity. How can corporate leaders ensure they are allocating capital to create sustained outcomes? Our performance improvement offering helps enterprises in both the pre-deal and post-acquisition phases to maximize value from a transaction.
With a modular approach, we begin with an assessment of the value creation possibilities. These include attributes related to productivity improvement, sales acceleration and cost optimization – both direct and indirect. Post the alignment of the initiatives based on our assessment, we design the implementation roadmap in minute detail. This is then followed by actual pilots and broader implementation.
Operational due diligence (ODD)
Value chains are being constantly reconfigured, and we now see companies in most sectors looking to make major adjustments to their long-term business models through acquisitions and divestments.
Whether on the buy side or sell side, operational due diligence has become a critical tool to enhance value for businesses.
ODD not only focusses on the past performance and risks but more importantly assesses the “to be” state and its corresponding upsides. The key question that we try to answer is around productivity, scalability and the risks associated with the business. From a value creation standpoint, ODD provides a strong foundation for implementing the right set of improvements pre or post deal.
Investment readiness
There are numerous situations where promoters of businesses seek equity financing, exit from their business, reduction of their stake via an IPO or a sale to a strategic or financial investor. These promoter centric and driven businesses lack the structure, processes, MIS and governance to stand the scrutiny of investors.
We help such companies transition from a promoter-centric business to a professional management-centric business. We align their organisation structure to the business model, streamline the business KPIs and MIS to facilitate investor diligence, strengthen corporate processes and prepare the company for proposed divestments.
Sectors we focus on
Broader manufacturing sector including
Auto / auto components
Cement
Chemicals
Consumer durables
FMCG
Industrial equipment & building materials
Steel
Packaging
Power & utilities
Textile
