Case Studies
APS’s portfolio optimization strategies are tailored to identify opportunities for cost savings, accretive monetization, and operational improvements aligned with each portfolio company’s business and financial objectives.
$1.1M Annual EBITDA Increase for Private Equity Client’s PortCo
This client was experiencing explosive growth since a strategic investment and were strategizing their future occupancy needs at their HQ. They were looking to expand from 55,000 square feet to approximately 70,000 square feet.
The pandemic forced the client to quickly develop a new workplace strategy integrating human capital, operations, and real estate.
With pressure from their board to reduce costs and accommodate a new working environment, the client needed a world-class team to deliver flexible, game-changing results. Enter APS.
By leveraging the expertise of APS, the client was able to assemble best-in-class SMEs that included Workplace Strategy, Architectural, Economic Incentives, PropTech, and Project Management professionals to optimize the workplace and reduce the footprint to under 20,000 square feet.
Our integrated team conducted multiple interviews and surveys with executive stakeholders and business line leaders to develop the optimal footprint and workplace strategy.
APS also ran a robust RFP process for incentives, real estate, and construction with multiple states, municipalities, landlords, furniture vendors, and general contractors.
APS’ proprietary process increased speed to market (even with supply chain issues during COVID), reduced costs, and significantly mitigated project execution risk.
We negotiated a $2.6M economic incentive package with $1.9M in cash paid out quarterly for seven years.
Excluding economic incentives, the client was able to increase EBITDA by approximately $1.1M annually while enabling peak performance for their employees.
Market Acceleration for Private Equity Client
This PE client acquired a family–owned, Midwest retailer for approximately $1.2B with a legacy supply chain/distribution network that consisted of a small DC at its HQ and retail stores acting as small satellite warehouses.
Their legacy network was too inefficient and ill-equipped to handle the client’s investment thesis for exponential growth.
The internal team planned for a significant time horizon of 30-36 months to implement the facility, hindering the ability to put the growth plan in action.
APS collaborated with the client’s chosen logistics consultant, analyzed state certified sites in multiple MSAs, and completed all pre-development activities at the selected site in 60 days.
We conducted labor studies in multiple MSAs. We determined that West Central Wisconsin would allow the Client to be in the 75th percentile for employer of choice while achieving competitive rates which would result in meaningful labor cost optimization and long-term labor-shed availability.
Leveraged multiple states and municipalities to achieve a $12.3M economic incentive package; the largest TIF ever created by the chosen city.
Our 100-day stratagem accelerated the board’s approval, with only 13 weeks from project kickoff to approval.
We increased speed to market by 18 months with an opportunity cost of $3.5M per month, 56% capex offset, with $12.3M incentive package that increased ROI and Payback timeline, while being $2.5M under budget on construction and two months ahead of original schedule.
3x Growth for Private Equity Firm Specializing in E-Commerce
This client was looking to optimally design and locate a state-of-the-art facility of the future. They faced many challenges including multiple legacy operational issues focusing on labor quality and availability, as well as transportation and logistics costs.
APS proposed consolidating two facilities and service lines: fulfillment (KY – 520,000 square feet) and parcel sorting (IN – 150,000 square feet).
APS collaborated with the internal Transportation and Network Strategy team to short-list several locations that would provide the client and their customers reduced fuel costs and accelerated service times.
We executed multiple labor analyses for each market to determine optimal labor availability and quality of labor.
We also identified a labor shed with affordable and quality labor that would put the Client in the 80th percentile of employers of choice.
Our team optimized equipment and facility design (16 different facility/operational iterations) within one 446,500 square foot facility in South Indianapolis.
APS negotiated real property and personal property tax abatement of $3.3M and reduced the facility footprints from 670,000 square feet to 446,500 square feet (33% reduction).
The client also experienced a 3x increase in facility throughput.
The performance of the new facility’s operations was material in the client’s sale of the business to a strategic partner at an above-market EBITDA multiple.
Tech Company Increases Enterprise Value by $152M
The client acquired their company through a take-private transaction at an EBITDA multiple of 19x.
Prior to the acquisition, they experienced significant growth organically, and through more than 20 bolt-on acquisitions, creating significant excess/surplus real estate.
The Client needed to quickly understand the financial implications and value within their real estate to measure the priority in their value creation plan, which would consist of 90+ locations throughout the United States for 4,500 FTEs.
APS provided a Rapid Diagnostic to develop a real estate value creation plan to identify potential cost-savings opportunities across their portfolio.
Our integrated team of best-in-class subject matter experts conducted multiple interviews and surveys with executive stakeholders and business line leaders to develop a value creation plan that aligned with the Client’s business and financial objectives.
The Client and their Board agreed to exclusively hire APS and its accelerated go-to-market strategy for rapid implementation.
APS’ Program Management team quickly assembled multiple local boots-on-the-ground teams to list properties for sublease and begin discussions with landlords on buyout negotiations.
Within 30 months, APS reduced the client’s number of locations from 90+ to 42.
This had a direct impact on EBITDA of $8M annually (8.5% increase) with an enterprise value increase of $152M based on the entry multiple of 19x, increasing EBITDA margin by 9.2%
$6MM Bolt-On Acquisition Doubles Revenue for PE Client
An independent sponsor private equity client is pursuing a multi-phase platform rollup in the Southeast's residential and commercial mitigation & restoration industry.
As part of this strategy, the client acquired two platforms, one of which included real estate owned by the seller.
However, the seller wanted to retire and sell both the company and the real estate, so the client decided they wanted to divest the real estate and focus their capital on bolt-on acquisitions rather than tying it up in the property.
The client engaged APS to provide valuation expertise and strategic real estate partnership as a trusted landlord.
Working in collaboration with their Family Office capital partner, APS negotiated with the building owner while the business negotiations were ongoing. APS provided advisory services for lease negotiations to both parties.
After the platform close, APS and its capital partner acquired the building and also invested alongside the sponsor in the platform company to enhance strategic alignment.
The sponsor's $6mm bolt-on acquisition, funded using the capital extracted from the facility, is currently under negotiation.
The acquisition is expected to significantly boost the company's revenue by almost doubling it, and drive a 30% increase in EBITDA.
Year One EBITDA Growth of $3.7MM for Engineering and Manufacturing Client
The client was undergoing exponential organic growth and required a clear understanding of future operating scenarios to increase their capacity.
To conserve capital for licensing acquisitions that would drive top-line revenue and expand EBITDA margin, they aimed to minimize CapEx. However, the current landlord, who was a previous owner of the business, was not a preferred long-term partner.
The facility's previous owner had environmental liability, and an unclear chain of custody due to multiple M&A transactions, which made it challenging to expand on the site without significant environmental risk and high costs to remediate.
The client engaged APS partners to conduct a feasibility analysis comparing the status-quo operation to multiple future state scenarios.
APS's integrated team of subject matter experts worked closely with the client's internal operations team to identify the most financially optimal manufacturing processes and CapEx.
After detailed analysis, APS narrowed down to two scenarios: relocating to a facility more than double the current size or expanding within the current facility's four walls.
The client considered two options for expanding their operations: relocating to a facility with exponential capacity growth or adding a 20,000-square-foot mezzanine of office space over the plant floor to conserve capital.
Although relocation would offer greater capacity, the smaller capital investment of adding a mezzanine was chosen. The mezzanine offered an impressive IRR of 151% with a payback period of only 21 months, whereas relocation would have provided an 83% IRR with a 33-month payback period.
As a result of this strategic decision, the client achieved $3.7mm in EBITDA growth during the first year.
