Big Data driving shareholder value

When considering a sale of your business in a year or more, can you shift its performance into a radically higher level?

To maximize proceeds for shareholders in a company sale, every effort should be expended to dramatically yet sustainably increase operational and financial performance well ahead of a sale.

Value Maximization (VMX) uses big data analytics to produce that valuation step change ahead of major M&A activity.

Our VMX group turns data assets you already own first into business intelligence, and then into shareholder value, primarily by increasing EBITDA. It is not unusual for our VMX team to drive EBITDA up by 25% within 6 months.

New sources of revenues are discovered, decisions are made faster and better, work is done more efficiently and cost-effectively.

We stand behind our capabilities and put our money where our mouth is. If we don’t deliver tangible results, we don’t get paid.

Transformative Results

For many in the mid-market, big data analytics feels out-of-reach, inapplicable for smaller companies. But the tools and techniques large companies use are extremely powerful for businesses of all sizes. Big data provides a new lens through which a thorny challenge can be viewed and solved. Here are some examples of what VMX can do; each of these clients previously thought ‘big data’ was something they should investigate, but did not know where to start:

  • For a software distributor, who sought to optimize the pricing of its products and the incentives of its salesforce, a 15% run-rate EBITDA increase in 3 months
  • For a beverage software platform who sought to expand and sell its software in other sectors, an exit at an attractive valuation to a strategic that was in one of these sector

Techniques & tools

Our VMX team uses best-in-class technologies and methodologies to analyze and curate data, produce actionable insights and push shareholder value up:

 

 

Is VMX right for you?

I know my business well, I'm skeptical that 'big data' can really help me.

How can data scientists really understand how to optimize a maintenance schedule for a truck fleet, or how to up-sell existing customers on products they already know about, just by looking at a spreadsheet? It’s entirely reasonable to question this. However, most of the best companies around these days got to where they are in large part because they mine their data for profit optimization opportunities.

Market dynamics in big data plainly reflects the value big data offers to businesses:

59% of organizations adopted big data before 2019; less than 10% of respondents have no plans to use big data at all.

Tableau, a data visualization & analytics leader, sold to Salesforce for US$15.3 billion, or 13x revenue.

In 2018, Big Data as a Service was valued at US$9 billion, and is expected to grow to US$32 billion by 2024 (CAGR = 24.5%)

How does VMX work?

PHASE 1: Establish a baseline & make initial recommendations

  • Define questions to be answered
  • Obtain and cleanse data (internal and external)
  • Agree on key metric(s) for baseline
  • Use advanced tools and techniques to analyze data and formulate initial recommendations
  • Suggest improvements to data infrastructure & governance

PHASE 2: Iterate, monitor, & improve performance

  • Help operationalize Phase 1 recommendations
  • Actively monitor movement in new data and financials for insights & progress
  • Assist in implementing data governance & infrastructure improvements

What types of data does VMX utilize?

We combine and analyze large amounts of internal and external data sources, for example, power usage on a CNC machine, store foot traffic, credit card transactions, StatsCan surveys and GPS data and mileage. Combined, these data sets, and the ability to parse through them, can help you gain a solid understanding of your business, in search for patterns that will give you the analytical edge. We deal with these complexities, so you don’t have to.

Don't I need to have some relevant data resources in place / some capabilities, to get started?

We have the technology platforms and the people to deliver, so the biggest question mark is the quality of your internal data.  A very common component of a VMX engagement is to upgrade and curate internal data. That said, in most cases, weak internal data sets can be augmented with external data sources to achieve similar results as though internal data were available.
Overall, VMX augments your team and provides you with access to techniques used by the likes of Uber and Amazon. Think of us as a natural extension of your team, adding deep insights to your own knowledge and experience.
Market Insights
From the archives: July 2020

The Case for M&A During COVID
The COVID-19 pandemic has thrown the world into unprecedented crisis. The IMF predicts that real GDP will contract by 7.6% in 2020 globally1. This…

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Case Studies

Software Distribution
Our client, a software distributor, sought to optimize the pricing of its products and the incentives of its salesforce . Within the 3-month duration of the VMX exercise, EBITDA run-rate increased by 15%, with visibility into more increases down the road.

Read Full Case Study

Beverage & Alcohol
Our client was searching for new sources of revenue as it faced increased competition in its core business. FirePower's VMX team identified an attractive new sector, and our client entered it. Largely due to its efforts in that new sector, our client was subsequently acquired at an extremely compelling valuation.

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Environics
Environics Analytics (“EA”) is a leading North American provider of marketing and analytical services. The company needed financing to support its expansion plans in the US and Canadian markets, and wanted to secure capital from a senior lender that understood EA’s value drivers. FirePower surfaced numerous proposals, then negotiated and improved on the terms and conditions to the benefit of EA.

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Since our launch in 2012, Sprout has become a leading workplace wellbeing platform, with a vision to become a global leader in technology-driven health and wellness solutions. Achieving our next phase of international growth required financing, and we considered several possible options, including FirePower’s private debt. The FirePower team dug in and worked to structure a non-dilutive, flexible debt offering that ultimately provided the best fit with our financing objectives.
Andrew Zimakas, CEO, Sprout