Talent Due Diligence with High Growth Tech Company
CLIENT: Private Equity Backed Technology Company
Overview
A private equity partner was considering investing in an attractive high-growth technology company. With a history of significant growth, an unpenetrated market, and a strong company culture with unparalleled employee retention, the company was being considered for a substantial investment from this successful PE Investment firm.
As the deal was all but signed, investors wanted to ensure the management depth and organization clarity were in place to quickly deploy capital and attain the high growth expectations. Specifically, the deal team wanted to understand the capabilities to leverage and gaps to address immediately following the transaction,
As the deal was happening quickly, the Summit team had one week to assess the organization’s talent and capabilities, key leaders, and make targeted recommendations to the deal team on how to rapidly scale the organization and required changes to be made.
Challenge/Opportunity
- PE investor planned to close on high growth tech company with global footprint within 3 weeks.
- Prior to close it was critical for the investors to understand if/how the target company mgt team could scale at 3x revenue over the hold period.
- PE sponsor requested management due diligence to assess against the investment thesis.
- Concerns about global expansion of organization needed to be addressed.
Actions
- PE investor planned to close on high growth tech company with global footprint within 3 weeks.
- Prior to close it was critical for the investors to understand if/how the target company mgt team could scale at 3x revenue over the hold period.
- PE sponsor requested management due diligence to assess against the investment thesis.
- Concerns about global expansion of organization needed to be addressed.
Outcome
- Identified leadership risks and made recommended transitions on key roles.
- Suggested organization changes to support the global expansion efforts.
- Prioritized human capital gaps & actions in 1st 100 days of close.
- PE sponsor closed in record time & key changes made early.
- Smooth transition from CEO to COO within one year of transaction.
- Company grew 6X in revenue in 3 years.
Ultimately the Summit team identified near-term talent and organization actions to ensure the growth strategy would be successful. The deal team made the appropriate changes and investments following the transaction. As a result, the portfolio company closed in record time and is on track to deliver its first year’s growth expectations.