Deal by Deal: A Private Equity Podcast The Ninth Wonder: Multiple Re-Rating Through Tech Transformation
Aug 20, 2025
Rafael Telahun, managing director at Altaline Capital Management, specializes in transforming service companies into technology-enabled assets. He discusses the concept of multiple re-rating, highlighting the shift from transactional to subscription models. Rafael shares insights on identifying the right targets for transformation, the significance of integrating technology, and the financial implications involved. He emphasizes the importance of aligning seller ambitions with capital partner expectations, while also showcasing how creativity can drive business adaptation and growth.
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Multiple Re‑Rating As A Strategy
- Altaline treats multiple re‑rating as transforming service firms into tech‑enabled assets to capture higher exit multiples.
- They focus on recurring revenue, scalability, vertical moats, and multiple growth vectors.
Target Vertical, Persistent Work
- Target vertically focused service businesses whose work is consistent and persistent across customers.
- Aim to convert transactional fees into pre‑bought volume and ultimately subscription pricing.
Build A Client Workbench First
- Modernize delivery by centralizing client work into a CRUD database and building a user interface.
- Replace folders and emails with an automated client workbench to enable consistency and automation.