How EY-Parthenon Unlocked a $10M Value Creation Opportunity Using CompanySights Benchmarks

Background

The EY-Parthenon Strategy & Transactions team specializes in supporting clients with due diligence and value creation services. Ali Adam, a Director in the London team, was leading a carve-out due diligence for a Private Equity (PE) firm looking to buy and stand up a business unit from a large software company.

The Challenge

The deal team needed to determine the appropriate size of each function for the carved-out business unit. Without reliable industry benchmarks, they faced a critical gap in their analysis - How lean or overstaffed was the target company compared to its peers? This uncertainty could impact both the deal valuation and post-acquisition operational efficiencies.

The Solution

By leveraging CompanySights functional benchmarking data, EY-Parthenon was able to:

• Compare the software company’s headcount ratios across key functions (engineering and technology, product, sales, marketing, finance, HR, and customer success and support) against industry benchmarks.
• Identify areas of excess staffing and potential cost savings post-acquisition.
• Provide their PE client with a data-backed blueprint for optimizing the target company’s structure.

The Result

With CompanySights benchmarks, EY-Parthenon’s analysis revealed:

1. An appropriately sized sales and marketing function (based on revenue).
2. A mostly onshore engineering and technology team and 15% overstaffing in back-office functions.
3. A total $10M value creation opportunity through workforce optimization, offshoring and efficiency improvements.

Testimonial

CompanySights benchmarking data was incredibly valuable - It filled a crucial gap in our analysis that resulted in a $10M value creation opportunity.

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‍— Ali Adam, Director, Strategy & Transactions, EY-Parthenon
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Conclusion

By integrating CompanySights benchmarks into their due diligence process, EY-Parthenon delivered credible insights, enhanced deal confidence, and identified a significant value creation opportunity for their PE client.

Interested to see how CompanySights benchmarks can enhance your due diligence and value creation services? Get in touch