Private equity’s math has changed. During the 2010s, a sponsor needed roughly 5% annual EBITDA growth to deliver a 2.5x return over a standard hold; today, per Bain & Company’s 2026 Global Private Equity Report, that same outcome now requires 10-12% average annual EBITDA growth. For one PE-backed industrial distribution platform, that shift exposed a hard truth: three straight years of flat, low-single-digit EBITDA growth, margin left on the table across four bolted-on acquisitions, and a sponsor watching its hold period stretch with no credible story for a premium exit.
Over the following eighteen months, Nova Capital Consulting’s value creation plan lifted the company’s average annual EBITDA growth to 14%, consolidated six add-on acquisitions onto a single operating platform, and helped the sponsor exit at a 2.7x MOIC — ahead of the fund’s original hold-period target.
The company had been assembled the way many mid-market platforms are: a strong founder-led core business, acquired by a growth-equity sponsor, then expanded through four bolt-on acquisitions over five years. On paper, revenue had nearly tripled. In practice, EBITDA margin had gone sideways, integration had stalled at the finance-consolidation stage, and the leadership team was still running the business like four separate companies that happened to share a logo.
The sponsor’s original thesis leaned on multiple expansion and leverage, a strategy that worked well for buyouts completed between 2010 and 2022, when McKinsey’s research shows leverage and multiple expansion accounted for 59% of PE returns, versus 41% from operational improvement. By the time Nova Capital Consulting was engaged, entry multiples had climbed to record levels and that math had inverted: the only credible path to the sponsor’s target return ran through the P&L, not the cap table.
The sponsor didn't have a broken business. It had an unmanaged one. Four good companies had been stitched together financially but never operationally.
Private Equity Advisory
Two of the four acquired businesses were still being run by their founders on informal earn-out arrangements, with no succession plan in place. The platform’s CFO seat had been vacant for seven months. More than 70% of CEOs at PE-backed companies are replaced during the average holding period, and PE executives cite leadership quality as a value driver far more often than efficiency programs or bolt-on M&A.
Each of the four acquired businesses had kept its own ERP, its own chart of accounts, and its own definition of gross margin. Monthly reporting to the sponsor took three weeks to assemble and was stale before it reached the board deck. The platform wasn’t short on data — it was short on a single version of it.
Key improvements included:
None of this reflected a broken business model. It reflected a platform that had scaled through acquisition faster than its infrastructure, pricing discipline, or leadership bench could keep pace.
What the company needed wasn’t a turnaround. It needed a value creation plan built to scale — one that could compress three years of underperformance into a credible growth story before the sponsor’s hold period ran out.
Nova Capital Consulting was engaged directly by the sponsor’s deal team, operating as an embedded extension of the operating partner function. The mandate was explicit: convert diagnosis into measurable EBITDA improvement inside 100 days, then build the operating rhythm to sustain it through exit.
The engagement opened with a bottom-up diagnostic that rebuilt the company’s EBITDA bridge from a single, consolidated data set. That discipline matters more with every deal cycle: as platform LBOs are projected to represent more than a quarter of all 2026 deal activity, sponsors increasingly need operating models sophisticated enough to run a consolidated platform, not four separate businesses.
Repricing was the first workstream launched, because it was the fastest path to EBITDA with the least execution risk. A SKU-level margin analysis identified underpriced accounts, inconsistent discounting, and freight and surcharge leakage. Add-on acquisitions now account for roughly 76% of all U.S. buyout activity, which meant getting pricing and margin discipline right on this platform would pay off on every future acquisition.
With pricing underway, the team turned to integration and M&A readiness in parallel. The four ERPs were consolidated onto a single reporting layer within 60 days, and a formal add-on scorecard screened 11 qualified targets against strategic fit, margin profile, and integration complexity.
The fastest way to change a portfolio company's trajectory isn't a new strategy. It's giving the existing team the pricing discipline, the data, and the leadership bench to execute the strategy they already had.
Operating Partner Services
Nova Capital Consulting worked alongside the sponsor and an executive search partner to fill both open C-suite roles within the first 100 days, and built a formal succession plan for the two founder-run business units — replacing informal earn-out arrangements with clear operating agreements and incentive structures tied to the value creation plan’s KPIs.
Eighteen months after the value creation plan launched, the platform looked like a different company — not because the underlying business had changed, but because it was finally being run as one.
Average annual EBITDA growth rose from 2-3% to 14%, driven primarily by the pricing and margin initiative, which recovered an estimated $3.2M in annual margin within the first two quarters, and by procurement savings that reduced input costs by 6% platform-wide.
Of the 11 targets in the scored pipeline, six were acquired and integrated onto the unified reporting and operating structure within the hold period, expanding the platform’s geographic footprint and cross-selling base.
Monthly reporting to the sponsor and board went from a three-week manual close to a five-day close on a shared KPI dashboard, giving the board real-time visibility into unit-level margin, pipeline, and cash performance for the first time.
The 100-day diagnostic, the pricing methodology, the add-on scorecard, and the weekly operating cadence Nova Capital Consulting built for this platform have since been adapted by the sponsor’s operating team as the standard playbook for two subsequent portfolio company engagements.
The platform exited at a 2.7x MOIC, ahead of the sponsor’s original underwriting case, a meaningful result given that Bain & Company now reports average buyout hold periods stretching toward seven years industry-wide. The sponsors winning in today’s market aren’t the ones with the cheapest capital — they’re the ones with the operating discipline to compound EBITDA growth quarter after quarter.
The future of financial services is being shaped by digital innovation, evolving markets, and new forms of value. We help financial institutions, fintechs, and digital asset businesses turn change into opportunity and build for sustainable growth.
Ideas that drive better
Comms Room, a leading communications newsletter website, wanted a modernized platform with a custom post type (CPT) setup to manage their daily articles and categorized content efficiently.
We developed a fully dynamic, user-friendly website that automates content organization, enhances navigation between topics, and supports high-volume publishing. The result is a sleek, modern platform that streamlines content management while elevating the reader experience — keeping Comms Room’s news delivery fast, engaging, and future-ready.