Value creation plan

Factual definition

The written playbook for the hold: the three to five initiatives, owners, and dates that turn the deal thesis into earnings before interest, taxes, depreciation and amortization (EBITDA).

Value creation plan at Hanil Widget Works

A value creation plan for Hanil Widget Works might list securing an additional alloy source beyond the two mills that supply 80 percent of its alloy, with a named owner and a date, to reduce supply concentration risk. An EBITDA benefit requires a demonstrated cost, revenue or disruption-avoidance mechanism.

Initiative progress at month 12 (hypothetical)

Illustration: 3 of 5 initiatives underway by month 12 of the hold

How Shayne Fitz-Coy uses Value creation plan

There’s almost like a bingo board of things that one does to unlock value. And almost every single business we look at will do most of those things.

Operating box · Platform company · Bolt-on acquisition · Management incentive plan (MIP) · Zero-based budgeting · Value creation bridge · Turd Polishing · Buy It, Make It Better, Sell It · The Five Laws of PE Value Creation · The Capacity Paradox · All of the glossary