Client Story

When a new combination must create value fast

A private equity firm owned a multimillion-dollar company that ran dozens of nationally and regionally accredited schools. The PE firm learned of another firm that would complement its portfolio company's footprint and increase its market share. But success depended on successful integration. The PE firm asked AlixPartners for help in coordinating the critical phases of the M&A process.

Smart systems secure a smooth integration

We started by examining financial reports and conducting interviews with both education companies’ management teams to analyze and compare important characteristics. What we looked at ranged from student populations and revenue models to overhead costs, onetime costs, campus-level profit-and-loss statements, and procurement patterns. Using what we learned, we developed population and revenue scenarios for the combined entity, along with estimates of overhead and other expenses. We also identified and quantified procurement-related savings opportunities.
In addition, we helped the PE firm’s M&A deal team compile and consolidate board-level documentation related to the deal, including a proposed go-forward operating model, student population and revenue models, and a set of actionable synergy opportunities to be executed post close. And during the due diligence phase, we developed summaries of key information and helped the deal team complete those materials. We then supported activities critical to effective post-merger integration planning. The activities included clean sheeting the combined organization—redesigning aspects of the entity’s operations and recommending future areas of investment necessary to help grow the business.

When it really matters

Our collaboration with the PE firm earned high marks. The two education service providers were successfully combined for maximum operational efficiency. And the merger delivered cost efficiencies that translated directly into a significant reduction in the new company’s cost base.