Dry Powder: The Private Equity Podcast Integrated Due Diligence: The Big Picture
12 snips
Oct 22, 2019 AI Snips
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Episode notes
Margin Overestimation
- Private equity clients consistently overestimate margin expansion.
- 75% of deals underperform in margin, resulting in contractions instead of growth.
Integrated Due Diligence for Dependencies
- Model dependencies like the impact of increased salespeople on customer churn and growth.
- Use integrated due diligence to understand these dependencies before acquiring a business.
Plastic Packaging Deal
- In a plastic packaging deal, the client expected 400 basis points of margin expansion.
- However, contracts required giving 100% of savings to customers, negating expected gains.