How we create value

Procuritas plays an active role in creating value in its investments. The team works together with the top management and boards of the respective portfolio companies to develop short and long term plans for focused value creation. These are then updated and monitored continuously by the board throughout the holding period. To ensure alignment of interest, management is invited to invest in the company alongside the funds.

The value of the company can be enhanced in a number of ways:

Increasing revenue growth

Revenue growth can be achieved by increasing sales force resources, expanding into new markets or new market segments, and by developing and selling new products. The organic growth can be coupled with add-on acquisitions that can give access to new markets and sales channels, as well as creating wider product assortments and better product mixes. Increasing resources in R&D may also stimulate growth in the longer run if the products become more competitive.

Improving margins

Margin improvements are often generated by improving pricing policies, increasing productivity, lowering costs, and improving the mix of services and products.

Enhancing strategic position

An enhanced strategic position means that a future buyer might pay a higher price for the business. In general, larger companies with a balanced revenue mix from different markets or segments typically have lower market risks and therefore generate higher prices. A company with a broad and balanced management team typically has lower operational risks and therefore also generates higher prices. Strategic acquisitions may be an important way to achieve an enhanced strategic position.

Selecting and incentivizing the right people

Investment in Human Resources is often neglected. Analysis, planning and actions are worthless unless the firm has excellent executives implementing the often jointly-decided  action plans. Procuritas therefore takes great care in working alongside the company’s management in finding top talent for the company. In many cases search firms, in combination with Procuritas' network are utilized to ensure that the company is being offered a very wide range of potential candidates for the job to be filled.

The value of Procuritas’ and management’s investment also depends on how efficiently the company uses its capital. Increased focus on working capital and better planned capital expenditures typically lead to better capital utilization.

In order to be able to challenge the value creation agenda, Procuritas always strives to appoint board members with appropriate industrial experience for each particular investment.