Theme #1
Tech Due Diligence and advice around bolt-ons and integrations
The first quarter saw us undertake a record number of pre-deal diligences covering a range of issues from assessing a recent technology implementation, evaluating the scalability of e-commerce and validating the effort to repurpose technology for a second and subsequent use case. We advised in sectors as diverse as DIY retail, private ambulances, industrial supplies, online safety and fertility.
While scalability, tech stack, team capability, supplier risk and data integrity tend to run through all diligence assignments, a key theme in Q1 was integration. Several of our engagements were bolt-ons or consolidation plays as owners cashed out ahead of CGT increases, weaker businesses teamed up with stronger look-a-likes, or existing groups looked to take dominant positions ahead of recovery.
The second quarter is looking similarly busy, and we're proud of the quality of reports, depth of findings and the positive feedback from our clients.
"Our clients value that we always start with the investment thesis or business strategy and work back - proving (or otherwise) the business's readiness to deliver on its promise. As such, we find our outputs go further than box-ticking or risk raising and see us aligning our findings with the critical issues for the team to tackle post-transaction."
Theme #2
A wealth of opportunities in Financial Services
Wealth management and IFA businesses have appeared on our radar many times in the first quarter. A combination of increased regulatory burden, a maturing of founder-owners and the opportunity for consolidation to rationalise overhead appears to be driving a solid theme through PE deal flow.
Financial Services is a specialism for Equator, and nothing quite releases scalability and drives down costs like digitisation. As a result, we're engaged in a re-platforming of a recently consolidated set of wealth management, IFA and advisor portfolios. It's an exciting challenge in branding and positioning, defining and designing User Experience (for advisors, self-servers and mandated investors) while retaining a complex set of integrations and audit tools. It's set to be a game-changer for the client, allowing advisors to handle more AUM with less overhead and freeing users to self-serve 24/7.
Our experience in wealth management, banking and insurance enables our diligence and strategy teams to add immediate value and identify expert insights that help clients make the right calls and access higher returns as a result. Look out for our upcoming white papers on Insurance and Wealth Management which might help with some of your thinking.
Why not read some of our financial services case studies on insurance, wealth management and more.
Theme #3
The upside of eye-watering multiples is happy sellers - Vendor Due Diligence for a global payment platform
A large team put in long hours to help a global payments business tell its story, explain its technology, draw out its roadmap and highlight its defensible, sustainable competitive advantage ahead of what looks set to be a very competitive sale process. The new owners will benefit from a clear line of sight between the business strategy and the supporting technology roadmap. We also drew out some key areas to strengthen, and some innovative solutions to exploit. The client was delighted with the final report, and we look forward to supporting bidder calls later this month.
Theme #4
Vital signs for the healthcare sector - a great response to our white paper
The last quarter of 2020 was all about healthcare. From community equipment businesses, fast-growth fertility clinics and 'dry eye solutions' to next-generation endoscopy. We were engaged in due diligence, creating innovative digital strategies, delivering total digital transformations and creating brand and digital marketing campaigns.
To capture our learning's and pass on our insights, we produced our white paper: 'Healthcare industry digital wellness report 20/21'. If you have not yet read it, you can download your copy here.
Please reach out if you want to discuss any of the themes concerning your target or portfolio businesses.