Is Private Equity right for my company?
You have a successful business and you know you are ready to make the next big move. You have a proven business model and you need investment to drive faster growth and expansion. You are looking at the options for securing that investment. Private Equity (PE) is one of the options open to you. The main question you might have - is PE the right move for you and your business?
PE can be a fantastic experience that drives ambitious businesses to transform and grow fast. The potential rewards for management and investors alike are huge. The outcome is often a very successful, and valuable, business.
BDO regularly holds ‘Private Equity Demystified’ events for businesses considering their next move. The events are about giving you the information and understanding you need to make an informed choice on PE. The events feature speakers from PE Houses and portfolio companies. BDO has also prepared ‘Private Equity Guide’: a detailed information outline about Private Equity and how it works.
Exploring Private Equity
PE investors are looking for businesses with the potential to deliver a substantial return on investment in a relatively short time, typically between three and five years. The rule of thumb is that they aim to double their money in three years or treble it in five years.
As a result, PE firms or houses, look for specific characteristics that point to a potential for fast growth in value. These include the macro-economic environment and micro-economic considerations such as value, growth, margins and cash conversion. PE houses will also look at the owner and the management team and a range of other factors.
Each PE house will place a different emphasis on these elements depending on their strategy, appetite for risk and approach to working with and supporting portfolio companies. This will affect how they value potential portfolio companies.
It is the job of your advisor to help you find the right PE partners for you.