The private equity firms recognised in this year’s Operational Excellence Awards put their value-creation skills to the test in a diverse range of markets, backing companies in various stages of development and with their own unique challenges and potential growth opportunities. Yet there are some common threads running through the winners’ value-creation plans in terms of the levers utilised to achieve operational improvements, drive growth and enhance value.
1 Identifying an unmet need
Healthcare has been top of mind for many over the past 18 months as the world grapples with the covid-19 pandemic, yet a number of 2021 OpEx Awards winners have been active in this market for quite some time. For some, the impetus was to provide healthcare to under-served populations.
In 2013, for example, Francisco Partners helped build Landmark Health from scratch in order to offer in-home medical care to elderly patients with chronic illnesses in the US. Today, more than 130,000 patients can access its care services.
A year prior to Landmark Health’s launch, TVM Capital Healthcare established Cambridge Medical and Rehabilitation Center after identifying a gap in the UAE healthcare market for post-acute, long-term care and rehabilitation services. By the time TVM Capital Healthcare sold CMRC in 2021, it had expanded to two facilities in the UAE and a third in Saudi Arabia.
2 Finding opportunities for expansion
For private equity sponsors that backed existing companies, strategically seizing opportunities to expand into new markets proved a key value-creation lever. For some this expansion was geographical. For example, Philadelphia-based PCI Pharma Services, a provider of integrated pharmaceutical development systems in which Partners Group acquired a majority stake in 2016, grew its footprint in the Western US, Europe, Canada and Asia-Pacific through a series of acquisitions.
Meanwhile, when Advent International invested in Polish parcel locker business InPost in 2017, it focused on strengthening its UK operations. After putting in place a new strategy for the UK market and securing new partnerships with retailers, InPost saw a significant increase in weekly parcel volumes.
Other firms looked for opportunities to move into new product or business lines. Apollo-backed airline Sun Country expanded into cargo, signing a 10-year contract with Amazon that commenced last year – a move that was pivotal in helping the company navigate the covid environment.
3 Investing in tech and user experience
Customer experience can make or break a company, a fact not lost on this year’s winners. When Cinven, Mid Europa Partners and Permira acquired Polish e-commerce platform Allegro, they built a wide-ranging value-creation plan that included investing in user experience, such as a new mobile app and a one-click check-out process.
Verdane, which won in the EMEA region for its work with Desenio, played a hand in boosting user experience via a new website design for the online retailer. Verdane also helped the company improve its data gathering systems, which enabled it to track sales performance and incorporate consumer trends into its creative processes.
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