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Turnaround assessment

October 18, 2016 Article 1 min read
Tim Weed
Plante Moran’s restructuring & operations improvement team can help your private equity group evaluate the likely success of a target’s or portfolio company’s turnaround plan. Specializing in assessing and improving underperforming companies, our restructuring consultants have a unique perspective on the key elements of a business plan.

Assessing the opportunities & risks associated with distressed targets

Underperforming companies can appear very attractive — it lookslike there is a core business but management may have failed to adapt to industry changes or not demonstrated leadership to make the tough decisions. Oftentimes, just moving performance metrics to industry averages can quickly boost EBITDA. However, if it were easy, the target company would already have done it.Knowing whether there are significant underlying problems and what it will take in terms of time, talent, and money can help you evaluate whether and how soon the company can be fixed. You can rely on our team of financial and operations experts to get the true story of the problems and the potential fixes by interviewing management and subordinatesand digging beneath the surface of historic metrics.They can evaluate whether the proposed action steps are realistic, what may be hidden from normal due diligence, and the risks and opportunities inherent in the company’s financial projections. They also can develop a customized action plan, combining their findings and suggestions with the target’s turnaround plan. The newly created plan will offer you a detailed project planning tool which will help you assign responsibility and monitor progress post acquisition.

Is it time to invest additional capital, be patient, or liquidate?

Portfolio companies face many of the same challenges they had before you invested: Does the management team have the right plan to improve performance? Is the plan good, but execution lacking? Or is the competitive landscape simply too difficult to overcome? Assessing the viability of the new business plan and getting an independent view of management can prove invaluable when making the right decision. Our restructuring and operations consultants can quickly evaluate the plan and management and give you the information you need to make a good decision for your private equity group. Plante Moran’s services for private equity groups and their portfolio companies include:
  • Deal flow (P&M Corporate Finance)
  • Strategic planning, analysis, & evaluation
  • Transaction & tax structuring
  • Transaction support services
    • Financial, strategic, operational, organizational, tax compliance, & technology due diligence
    • Purchase price allocation
    • Tangible & intangible valuation
    • Closing/opening balance sheet audits
  • Employee benefit plan review
  • Transition period support
    • Interim financial support services
    • Information technology 
  • Fund assurance & tax services
  •  Portfolio company financial reporting 
  • Portfolio company tax planning & compliance services
  • Portfolio company exits (P&M Corporate Finance)

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