M&A TV (The M&A Advisor)

Beyond the Numbers Operational Excellence Drives Deal Value

The episode centers on why operational excellence matters throughout the M&A lifecycle, especially for midsize manufacturing platforms. Host Roger Agenaldo interviews Henning Bronze and Gizai of Komoto Consulting, who argue that financial models alone miss critical plant‑level realities that can make or break a deal. They outline six pillars that private‑equity sponsors scrutinize: growth potential, cash stability, cost efficiency, capacity utilization, strategic roadmap, and governance discipline. By visiting factories, consultants uncover mismatched IT systems, duplicated production lines, and plants operating at only half the benchmark output—issues that can erode margins by up to 50% and obscure true valuation. Concrete examples include historic firms with 30‑40‑year‑old plants that lack standardization, and a case where Komoto evaluated twelve candidate sites, revealing a 20%+ return‑on‑sales upside once footprint consolidation and process harmonization were applied. The hosts stress that without on‑the‑ground operational insight, buyers risk overpaying and sellers may undervalue their assets. The takeaway for dealmakers is clear: embed operational due diligence from the outset, use the six‑factor framework to shape integration plans, and leverage post‑close value‑creation initiatives to secure higher exit multiples. This disciplined approach transforms hidden inefficiencies into measurable upside and protects investors from costly surprises.