Private Equity Value Creation Advisory, Led by an Operator

Q: What is reviewed before a value creation plan?

The EBITDA bridge — the gap between current normalised EBITDA and the target. Pricing architecture and margin leakage. Working capital position and cash conversion cycle. Management cadence and execution capability. Customer and channel profitability. Branch or network performance variability. These are the inputs that determine whether the value creation plan is achievable.

Private equity value creation advisory should test whether the operating reality can deliver the investment case. I work with deal teams, boards and portfolio leadership to identify the commercial and operational constraints behind the model, quantify the value at risk and translate the thesis into an executable plan. The focus is practical: EBITDA quality, pricing architecture, working capital, management capability, decision rights, execution cadence and readiness for the next transaction event.

Scope The Value Creation Advisory Mandate View Operating Partner Support

$110M+ Revenue Managed

17× EBIT Exit Multiple

20+ Industrial Operating Experience

12 Countries Operated

Where it applies

Where Operator Advisory Supports Private Equity

Private equity value creation depends on operating performance. Most PE firms have strong financial engineering capability. The gap is usually in commercial and operational diagnosis — understanding why the business is or is not converting revenue into EBITDA and cash at the rate the model assumed.

Operator advisory fills that gap at three points in the investment cycle: before diligence closes, during the first 100 days, and when portfolio performance is not tracking to the value creation plan.

Pre-Diligence & Confirmatory Assessment

An operator’s review of the business before diligence closes. Identifying where the commercial model is robust and where it is fragile. Pricing architecture, working capital structure, EBITDA defensibility, customer concentration and management depth — tested before the investment thesis is committed.

First 100 Days & Post-Acquisition Planning

Commercial baseline assessment, operational quick wins, management team capability review and working capital stabilisation. The first 100 days after acquisition are where value creation plans are either confirmed or complicated. See the first 90 days framework .

Portfolio Performance Recovery

When EBITDA is not tracking to plan. When pricing discipline is breaking down. When working capital is deteriorating ahead of exit. Independent diagnosis of where the operating problem actually is — before the deal team commits to a response that may not address the right issue.

Pre-deal

Pre-Deal And Diligence Support

Financial diligence tells you what the business has earned. Operator diligence tells you whether it can keep earning it under new ownership — and what would need to change for the value creation thesis to be achievable.

The areas an operator assessment covers before diligence closes:

EBITDA Bridge Review

Reviewing reported versus normalised EBITDA. Identifying where earnings are defensible and where they are dependent on conditions that may change post-acquisition. Modelling the EBITDA bridge from current to target.

Pricing Architecture

Assessing how pricing decisions are made and governed. Identifying where pricing leakage is occurring and what the margin improvement opportunity is if pricing architecture is strengthened.

Working Capital Assessment

Reviewing the working capital cycle — debtors, creditors, inventory — and modelling the cash release opportunity. The working capital improvement calculator is used to model scenarios.

Management Capability Review

Assessing whether the management team has the depth and execution capability to deliver the value creation plan — or whether key gaps will need to be addressed before execution can begin.

Value creation

Commercial And Operational Value Creation

Once the investment is committed, the value creation plan needs to be sequenced correctly. Operator advisory provides the commercial and operational view that underpins execution planning.

The areas typically covered in value creation advisory:

Pricing architecture — How pricing decisions are structured, governed and enforced at the point of sale
Working capital release — Debtors, creditors and inventory cycle improvement toward cash conversion
Branch and network performance — Identifying variability across sites, branches or channels and sequencing improvement
Management cadence — Establishing operating rhythm, accountability structures and reporting cadence
Customer and channel profitability — Understanding which customers and channels are generating EBITDA and which are consuming it
Reporting visibility — Building the commercial visibility the board and deal team need to track the value creation plan. See performance visibility
ERP, analytics and AI enablement — Where technology is improving execution speed and commercial visibility versus where it is creating complexity without output

“The investment thesis is only as strong as the operating system that has to deliver it. Most value creation plans fail not at the strategy level — but at the execution level.”

Scott Foster · Shape Executive

Escalation path

When To Move From Advisory To Mandate

Advisory is the right structure when the situation requires independent diagnosis before a response is committed to. When the situation requires embedded execution — when the operating problem needs to be solved inside the business rather than reviewed from outside — advisory transitions into a mandate.

For PE firms, that typically means moving from advisory into an operating partner engagement — where an experienced operator is embedded in the portfolio company to drive EBITDA improvement, working capital discipline and commercial performance during the hold period.

The advisory review usually defines the scope and urgency of what the embedded mandate needs to address. It is a more efficient entry point than deploying an operating partner into a situation that has not yet been diagnosed.

Related support

Related PE Support

Operator advisory for private equity firms is one part of a broader set of PE-focused support available through Shape Executive.

Operating Partner Mandate First 90 Days Value Creation Investment Work Investment Thesis

Common questions

Frequently Asked Questions

How does operator advisory support private equity firms?

Operator advisory gives PE deal teams and portfolio managers an independent operator’s view of the business behind the investment thesis — before diligence, during the first 100 days, or when the value creation plan is not tracking to EBITDA targets. It covers commercial performance, working capital, pricing architecture, execution cadence and management capability.

When should PE use advisory rather than an interim executive?

Advisory is appropriate when the issue requires independent diagnosis rather than embedded execution — when the deal team needs a clear read on what is wrong before deciding how to respond. If execution support is required, advisory typically transitions into an operating partner mandate or interim CEO engagement.

What is reviewed before a value creation plan?

The EBITDA bridge. Pricing architecture and margin leakage. Working capital position and cash conversion cycle. Management cadence and execution capability. Customer and channel profitability. Branch or network performance variability. These are the inputs that determine whether the value creation plan is achievable at the assumed EBITDA and timeline.

How does advisory support the first 100 days?

The first 100 days after acquisition are where value creation plans are either confirmed or complicated. Advisory support in this period covers commercial baseline assessment, operational quick wins, management team capability review, working capital stabilisation and the sequencing of improvement priorities before the business moves into full execution mode.

Scope The Value Creation Advisory Mandate

If the investment thesis requires an operator’s view on the business, that conversation is the right place to start.

Scope The Value Creation Advisory Mandate Back To Operator Advisory

Post-acquisition value creation is fundamentally about improving EBITDA quality, not just quantum — the multiple applied at exit responds to earnings defensibility and consistency, not headline growth.

The relationship between EBITDA vs Enterprise Value at exit depends on what has been built during the hold — operational quality compounds directly into multiple expansion.

The value leakage diagnostic identifies where pricing, cash, demand and execution are underperforming — the starting point for any value creation plan.

The Transferability Gap — the difference between what the current operator believes and what the next owner can underwrite — applies equally to PE hold-period businesses approaching exit.

Working Capital Definition release is typically the fastest path to cash improvement in the first 90 days of a PE mandate — before pricing and commercial engine improvements compound.

Understanding what selling to private equity means operationally is the foundation of any PE value creation mandate — the post-deal obligations are the real commitment, not just the transaction.

The Operating Partner Library™ is the deployment architecture for PE value creation mandates — 100-day plans, post-acquisition integration frameworks and value creation planning tools.

What private equity looks for in a business at acquisition is the same as what PE looks for at exit — except the hold period is the window to close the gaps between entry and exit criteria.

PE value creation depends on what buyers look for in management teams — a management team that can execute a value creation plan without constant shareholder intervention is the operating foundation of any successful PE hold.

Post-acquisition leadership support is the operational delivery mechanism for private equity value creation — the embedded operating accountability that ensures the management team executes the value creation plan rather than deferring to the shareholder.

That embedded role is, in most PE structures, an operating partner — accountable for execution rather than oversight, and distinct from a deal partner or board adviser.

Shape Executive Operating Architecture