Acquisition scan for PE firm

Challenge

In the early stages of recovery from the 2008-09 recession, a private equity firm asked us to help identify promising privately-held firms in cyclical sub-sectors where the investors had limited experience. The investment premise was that cyclical opportunities were still available, but required extensive research to uncover the most attractive firms within a specific set of target criteria.

Approach

• Identification: Used a top-down approach to identify promising sub-sectors – ranging from specialized BPO software to oil & gas software and insurance services.
• Qualification: Assessed public company performance in each sub-sector, consulted multiple data sources to identify private companies and spoke with a broad panel of subject matter experts.
• Screening: Applied multiple screens, based on agreed criteria, to the initial set of 216 private firms we had qualified in eight economic sub-sectors.

Results

• New Harbor recommended 96 top-priority targets.
• Educated PE firm’s top and middle management.
• Handed off lead stream to PE’s principals for exploration of interest and opportunity.