Ephor’s Corporate Development Process
Introduction & Definition
In today’s marketplace, companies must overcome resource and talent constraints, increased competition, changing competitive market dynamics, and growing compliance and customer complexity requirements. As a result, “Organic Growth” can be a slow and laborious venue for growth and scale creation.
An alternative to an exclusive organic growth strategy is growth through strategic Corporate Development Programs that can include: acquisition, joint ventures, strategic partnerships, or holding company concepts.
Growth through Corporate Development has become a very attractive venue for expansion over the past ten years, especially following the economic restructuring after 2008. The economic vicissitudes pre-Trump resulted in a difficult growth environment, especially for labor-intensive, service business service models. History and relevance tell us that there are thousands of service businesses that have reached their “proverbial ceiling,” without the capability, capacity, and access to capital to grow.
Therefore, acquiring, joint venturing, strategic partnering and the formulation of holding company concepts to transform and grow your business is worth considering and evaluating diligently.
When should you consider Corporate Development expansion?
Organic growth is limited to single digits and becomes more difficult to execute upon
Your cost of customer acquisition is greater than your competition's, and those costs are rising and are capitating the EBITDA of your business.
Access to needed operational and leadership skill is limited
Product/service and customer value proposition needs exist, due to dynamic market changes
Significant business processes or product capabilities require “speed to market”
“Scale” must be created such that operating leverage can be achieved especially in the SG&A cost categories
Corporate Development Growth has a higher ROI than Organic growth
To maximize the value of your business, and to support your growth expansion strategy beyond organic venues, Corporate Development is a great tool. The M&A portion of this process and function is known as Buy-side Corporate Development, or, in laymen's terms, Buyside M&A.
Whether Corporate Development is used to enter a new geographic location, strengthen your product/service offerings, or build scale, Corporate Development initiatives are an option to expand your business model.
However, M&A it should never be the exclusive growth venue!
Successful Corporate Development = Ephor GrowthStep Process
The days of being able to build a family business into an IPO within a few years are largely gone, as the pace of change, speed of technology, increased competition and changing business landscape requires companies to shift and evolve their business models at a faster pace than ever before. The need to stay ahead of both customers and the competition is a real challenge in creating a growth-oriented business.
Over its 20 year history, the Ephor professionals have exhibited high growth and wealth-creating business model success by developing a proprietary Corporate Development Process called GrowthStep. Ephor Group’s Inc. GrowthStep approach to Corporate Development initiatives is a proven, established, and adopted methodology and process, that has been used by many of the most successful business models in the services sector.
GrowthStep was developed in the late-90’s, and based on best practices learned within IBM, Edward Jones & Co., Medaphis Physician Services, and Outsource International and has been both validated and utilized by numerous high-profile, branded private equity firms, as well as many “Strategic Buyers” in the sector.
GrowthStep is a strategic proactive outreach-oriented approach, which develops a population of “targets” that meets “the criteria of the near-perfect company” to acquire or partner with.
GrowthStep is a process-driven, scientific, metrics- and ROI-oriented approach to transformational growth for your company.
Ephor’s GrowthStep methodology has resulted in 13 successful transactions over 20 years, allowing our clients, and their institutional investors to achieve their growth, Corporate Development, and institutional ROI objectives.
Ephor’s proprietary approach ensures Corporate Development growth is “accretive” to shareholder objectives and provides ROI returns that are attractive to all institutional investors. As such, raising capital for Corporate Development growth is a “no brainer.” Ephor’s track record of success facilitates the procurement of growth capital and efficient financial engineering on very attractive terms for our client company.
Corporate Development Results & Benefits
GrowthStep ensures “Best of Breed” results and performance because it:
Identifies the most attractive and additive opportunities (via primary intelligence, primary research & advanced profiling and TARGETING techniques, which map the competitive and potential target companies).
Maturates potential Corporate Development target acquisitions via a proprietary process that “creates a seller” based on changing market perspectives, valuation considerations, operational synergies, and therefore matures prospective targets into “Win Win” opportunities.
The process creates proprietary opportunities/deal flow; therefore, “banked” opportunities are not part of Ephor’s GrowthStep proprietary process.
Has consistent, predictable, and forecastable results.
Considers integration planning, cultural considerations and fit, and operational synergies. The near-term financial aspects are not the most important driver of a growth activity: long-term shareholder wealth creation is the ultimate goal and outcome!
One of the most important by-products of Ephor’s outsourced GrowthStep is that you, the CEO, and your team can remain focused on running the business. Rather than being distracted by the daily grind of evaluating and then executing on a transaction, your team becomes involved only when discussions have matured, and the potential transaction deal has reached the due diligence and integration planning stage.
Practical GrowthStep benefits include:
For the CEO and other C-Suite Executives: variable cost outsourced corporate development skill and expertise comes at a fraction of in-house fixed cost departments
For Institutional Investors, it completes your “Buy & Build Investment Thesis”
Leveraging of best practices of full-time M&A and corporate development experts and seasoned transaction veterans
Education and nurturing of the market around your targeted enterprise valuation multiples, buy-side terms and conditions, and shareholder enhancements
Identification of acquisition assets: talent and management acquisition, best practice processes, etc.
Enabling the company to make informed “Make or Buy” decisions
Integration of best-in-class best practices, capabilities and competencies
Evaluation and sizing expansion potential and options
Achieving pro-forma results, budgeted and modeled (Operational execution guaranteed)