ACG New York panels and conversations challenge traditional approaches to value creation strategies in the middle market
By Zoë Bodzas
(New York) ACG New York recently hosted a series of panels and a fireside chat on transformational value creation strategies for portfolio companies, offering a variety of experienced perspectives on how to differentiate and compete in today’s changing middle market. Sponsored by Katz, Sapper & Miller, Venetia Partners, Pepper Hamilton, and TM Capital, the event, “Transformational Value Creation: You Paid 10X, Now What?” presented conversations on three critical strategy areas: Growth Initiatives, Operational Improvements, and Talent Acquisition/Assessment. In addition to networking opportunities, there was a fireside chat with Bertram Capital’s Jared Ruger and Michael Goldman, Founding Partner and Managing Director of TM Capital.
Bob Fitzsimmons, Managing Partner of High Road Capital, moderated the morning’s first panel, Growth Initiatives, which featured Grant Hunter, Partner of Inventis Strategies, LLC; Don McNichol, Director of Performance Improvement Partners; David Reynolds, Partner of Venetia Partners; and David Wojcik, Senior Vice President of Insight Resourcing Group. Common themes emerged when Fitzsimmons questioned panelists about a “standard playbook” in their approach to value-creation. Panelists emphasized the power of thorough
data-collecting early on in the assessment of a potential investment and envisioning what McNichol calls “a holistic roadmap from an acquisition perspective” for the company’s future. Wojcik also advocated for rigorous programs that begin with data and consider the supplier base: “You’re only as fast as the slowest company,” after all. Reynolds further warned that company culture is an important consideration in growth initiatives, as “leadership [could be] sold on a goal/result, but not sold on what it takes to get there.” A third-party perspective, in this case, helps.
Afterwards, a second panel delved into Operational Improvements for portfolio companies, pre- and post-acquisition. Corey Massella, Partner of Katz, Sapper & Miller, lead a discussion with John Bisack, President and Managing Director of Performance Improvement Partners; Tom Gesky, CEO of Resourcive; and Alex Miller, Senior Vice President of Synergetics. Two key takeaways from this panel included the potential value of informed technology implementation and the role of timing. As Bisack concisely put it, “Technology shouldn’t be done for the sake of technology” in an acquisition; rather, firms should champion a cost-benefit perspective, examining technology options in business terms and seeking to leverage technology in an efficient manner. Miller emphasized the necessity of gaining knowledge very early on in the process if a team hopes to commit to the financial outcome of a company. Gesky urged a strategy that is both light-touch and “future-proof,” a preparation for acquisition and beyond.
After Operational Improvements, the room considered Talent Acquisition and Assessment in a thoughtful discussion moderated by Jim Rosener, Managing Partner at Pepper Hamilton. Joined by Scott Estill, Partner at Skillcapital; Steven Nigro of TAG Financial Institutions Group, LLC; and Tim Foster, Principal at Sales Benchmark Index. When Rosener presented the common concern about internal confusion in a company during an acquisition, Foster offered a best practice of tying the pay of chief officers to the performance of revenue marketing and denounced an “over-emphasis on industry experience;” ultimately, there is value potential in unconventional but common-sense strategies. Nigro and Estill also advocated for up-front transparency about management changes.
Following the panels, guests listened to a literal fireside chat that offered insight on how some of the strategies and tools considered earlier in the morning can lead to real-world value and growth in middle market portfolio companies. As Michael Goldman chatted with Bertram Capital’s Jared Ruger, attendees explored some case studies of innovative value creation strategy. Ruger shared elements of Bertram’s five-sided methodology for value transformation in newly acquired companies, highlighting the underutilized potential of mainstream companies with a “long tech backlog.” In-house web developers helped differentiate Bertram’s portfolio companies, a technique that has proved to be a “value-creation engine.” The conversation proved to be a productive capstone for the day’s concepts: with proactive, robust strategies and unconventional thinking, there could be untapped growth available in management, operations, technology, and elsewhere.