A business that had never been profitable

The situation

The business sat inside a private equity portfolio that took on companies nobody else wanted. The team called it the island of misfit toys. If something was badly broken, it ended up with them.

This one had never been profitable. It was running an EBITDA margin of −7%, and there was no prospect of additional capital or headcount to fix it. Whatever got done had to get done with the people and the budget already in the building.

What we did

The work started on the revenue side and stayed there: rebuilding how the company sold, who it sold to, and what it charged. Over thirteen years that meant designing the sales organization more than once as the business changed shape, and building a delivery team of more than a hundred people across the United States, the Philippines, and India.

The constraint turned out to be the useful part. With no budget for a rescue, every change had to pay for itself out of the existing cost base. That is the same discipline a lower-middle-market portfolio company operates under, and the reason we do not arrive recommending a platform purchase.

The result

Revenue grew 210% and the EBITDA margin moved from −7% to +10%, the first sustained profitability in the company’s history.

This is the half of our record that has nothing to do with AI, and it is the half that makes the AI work credible. A company that cannot execute a pricing change will not execute a process redesign.

• Operating leadership · Multi-sector · Lower-middle-market portfolio

  Growing portfolio revenue from $10M to $180M

• M&A · Healthcare · Media · B2C · Revenue cycle management

  Buying and selling companies, and getting the deal closed

• Turnaround · Out-of-home media

  A million a month in losses, taken to break-even