To be sure that the companies in their portfolio generate maximum value, private equity firms diligently seek ways to improve performance. However, many management teams have difficulty assessing the impact of improvement initiatives and investments on EBITDA and cash flow. For example, what is the EBITDA contribution of a lean manufacturing initiative? Yet, to prioritize and select actions and improvements for an organization you must be able to accurately quantify their financial outcomes.

Tunnell is uniquely qualified to pinpoint the actions an organization can undertake that will yield the most value in terms of EBITDA and cash flow. Just as importantly, we have the experience, the methodology, and industry knowledge to support the execution of those actions. As a result, private equity firms can typically expect Tunnell to add 3 to 5 points of EBITDA to any company in their portfolio.


 
 

Case Study:
Operational Value Improvement and IPO Preparation

 
A major trucking company pursuing a growth model based on acquisition was preparing for an IPO. The company needed to identify the key strategic initiatives that would strike the right balance between current year profitability and long-term growth. The success of the upcoming IPO depended on the executives’ ability to strike this balance and provide a clear, dependable message to the market.

Using proprietary decision analysis tools, which incorporate risk and uncertainty, Tunnell’s experienced team developed the optimal set of initiatives and the optimal timing for a successful IPO. Additionally, Tunnell was retained to support implementation of these initiatives.

The result was a strategic plan with initiatives that had a 4 to 1 return of current EBITDA to investment and a roadmap to a gain of 7 points of EBITDA. Additionally, the executives had a crisp, defendable message to the IPO market and its employees.