We wrap up our series on distressed investing with the final step. You’ve identified your distressed investment opportunity, crafted your strategy, performed your due diligence, structured the deal and, ultimately, closed it. Now it’s time to maximize the value of your deal. After all this hard work, you want to optimize your return.
Time is of the essence after closing. Ideally, you’ve designed your turnaround plan well before the deal is signed. This leaves you with the room to make the quick and oftentimes difficult decisions that will generate a satisfying return. But until you’re handed the keys to the front door, there are certain aspects of this business that remain a mystery. As sound as your pre-close 30, 60, 90 and 100-day plans are, until you see how the business is operating day to day and understand where the inefficiencies lie, chances are your plan is going to be a moving target that requires reassessment.
Ask yourself, does my original plan still stand up? Do I need to bring in outside help—or do I use the management team that’s already in place? The pressure’s on to not only keep the company afloat but to prove to stakeholders through measurable results that you can return the business to profitability.
You could compare managing a distressed business to flying a plane while simultaneously changing the engines and developing a new control system—it’s a high pressure environment that requires decisive action and confident decision making. As you take control consider the following:
Ultimately, planning, execution and measurement are all designed to lead to growth. And all of this is exacerbated in a distressed situation. By taking a fit-for-growth mentality to this process, you’ll make short-term changes with an eye toward both immediate benefits and long-term growth.
For a look at our distressed investing capabilities, visit www.pwc.com/ca/distressed-investing