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Simple Solutions, Golden Results

 

 

 

 

 

 

 

 

 

 
 
 

 

 

 

 

 

 
 

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Operating Partner vs

Middle Market Methods

Private equity group portfolio companies

 

 

 

 

A “toolbox” of field-tested operational best practices that create accretive value in three ways: growth, efficiency, and leadership. 

 

 

 

"Operating partner" is an ambiguous term in private equity, and covers a myriad of primary responsibilities. As referenced here, an operating partner works directly with portfolio company leadership teams and/or project teams to address execution issues in the business model. An operating partner is a highly interactive, hands-on, in-the-trenches, "doer" role.

For private equity groups with operating partners, Middle Market Methods complements bandwidth and subject matter expertise. Moreover, an “outsider” is sometimes a better alternative for change management reasons.
For private equity groups without operating partners, but which desire operational support for their investments, Middle Market Methods is a viable alternative. Essentially, Middle Market Methods manages operational initiatives for the firm so that deal teams may focus on transactions.

 The Value of Results


"Each incremental dollar of EBITDA added to the bottom line by a growing, investment grade business model is worth at least five dollars of enterprise value to investors. The more predictably scalable and robust EBITDA sustains due diligence, the more likely that the enterprise value multiplier will realize a 0.5-1.0 premium. Consequently, all endeavors to engineer business model processes that engender an earnings legacy enjoy ample vindication—especially when these initiatives enjoy internal support.”