No Shame in an EBITDA Game
There’s no shame in your PE game- unless of course your game is to exploit low purchase valuations and rely on a strong exit multiple environment. Those days are long gone. In the context of sky-high valuations, today’s PE game focuses on generating returns via EBITDA improvement – creating value by changing (and at times, completely restructuring) the economics of the business. Where performance transformation is the goal, early underperformance indicators (EBITDA trending flat or declining with potential for covenant default) should raise the red flags to full mast. At Accordion, EBITDA improvement isn’t just our game, it’s our main gig.
The Accordion Approach to EBITDA Enhancement
EBITDA A to Z
Restructuring the economics of the business requires an exhaustive (yet accelerated) understanding of its foundation: from revenue and margins management, to operations and delivery, from G&A and IT efficiency, to working capital and cash management. Accordion’s phased approach to EBITDA enhancement is to assess (exhaustively), stabilize (quickly), restore (by priority), and ultimately, grow (via an achieved value creation plan).
Not all growth is equal: either in its transformative potential or in the laborious process to achieve it. Accordion’s EBITDA diagnostic identifies the quick wins for immediate implementation while concurrently creating strategic implementation plans for the types of EBITDA-impacting initiatives that require and affect larger pools of opportunity. We identify, prioritize and scale implementation plans around lean manufacturing, scheduling/staffing, overhead consolidation, pricing and sales strategy, vendor pricing terms, etc., etc.
Not All EBITDA Is Equal (either)
Once upon a time transforming companies into financially efficient operators while generating revenue growth was a reliable formula for successful exit. Now, bottom-line improvements alone will not ensure superior returns. In fact, some might argue that top-line growth generated EBITDA is more valuable as it helps to deliver a higher multiple. At Accordion, we’ve successfully driven growth from top to bottom, and all EBITDA points in between.
Been There, Done That
Practice, practice, practice. It’s how you get to Carnegie Hall and how you realize EBITDA improvements. At Accordion, we have a deep playbook of EBITDA enhancement experience across multiple industries and across companies at various maturation stages. Our clients benefit from our experienced knowledge of best practices and unique solutions to recurring EBITDA-impacting issues.
If it ain’t broke – Fix it anyway; Get your business house in order before your competitors, to get your business ahead in the race.