Unlocking $35m+ in trapped cash for a PE portfolio company fuels its value creation plan for high growth

Vision

A PE firm set out to scale its acquisition into a high-growth generics and consumer healthcare platform. But Covid-era stockpiling and an overstretched cash conversion cycle choked cash flow and stalled value creation. It needed a quick pivot to unlock cash and deliver sustainable bottom‑line improvements to self-fund growth without compromising exit-ready earnings quality.

Challenge

• An accumulation of $80+ million excess inventory and ~180 days inventory outstanding (DIO). 
• Short term inventory fixes, supply chain disruption, and rapidly rising interest rates were damaging the company.
• Competing agendas in Commercial, TechOps, and Finance had disconnected production schedules from supply and demand planning. 
• Time-pressure to maintain a high quality of earnings ready for sale.

Solution

The portfolio company partnered with Genioo for our expertise in inventory management, but with our deep understanding of PE value creation plans and value realization the scope broadened to an E2E supply chain transformation. Here's how we helped:

• Working alongside the CEO, CFO, and Commercial and TechOps Executives we first conducted a two-week diagnostic to give stakeholders rapid diagnostic of the manufacturing sites and supply chain operations. 
• Our proprietary Top Team Alignment (TTA) program facilitated in-depth leadership discussions to reconcile their perceptions with the reality of the diagnostics and agree on a two-step approach:

1. To take immediate action with Finance and TechOps to stop the bleeding; tightening supply and demand planning to reduce DIO, negotiating with suppliers to cancel outstanding POs, and looking at where excess stock could be sold. 
2. To design, validate, and execute action plans in six priority workstreams to completely transform the E2E supply chain organization and make sustainable step change improvements to the bottom line. 

• Our One Team way of working engaged stakeholders across Commercial, TechOps, and Finance to harmonize the ambition and approach and foster better cross-functional collaboration for future. 
• Strong governance connected all the workstreams to enable clear oversight and escalation mechanisms to keep up momentum and affect decisions and change fast. 
• Everything was designed and built to work in reality and to hand back to business process owners to carry forwards in readiness for sale.

Impact

Initiatives:​ 
Within 12 months we:

• Reduced gross inventory by $50m+
• Reduced DIO by 35 days
• Reduced excess inventory by $35m+

This freed up capital and enhanced quality of earnings for the year’s close.

Investment:​
Our partnership enabled sustainable capital efficient growth and latest company reports show:

• Double revenue and EBITDA
• A sale secured for a profitable private equity exit