Defense/Aerospace Contractor
Background
In 2013, an aviation services provider approached growth[period] for assistance in growing its business. At the time, the organization had approximately 100 employees and $20M in revenue.
Challenge
The goal of the company’s leadership was to increase revenue to $250M in five years, then sell the company for more than 10 times its original worth. Typically, in this industry, a successful company can expect to increase revenue from 10 to 15 percent annually. So, relying on the standard rate of growth, the company would fall far short of the $250M revenue target in five years. Recognizing these challenges, it hired growth[period] to create a novel growth-to-exit plan which would serve as a roadmap for achieving the desired goal.
Solution
Accordingly, growth[period] created a five-year strategic plan which included: targeted opportunities grouped in order of strategic priority; possible bolt-on acquisition targets; and strategic guidance pertaining to other aspects of the company’s business development plan. The ultimate goal was to create a very detailed plan to use as a literal roadmap to achieve smart growth. Starting in 2013, we drew up a roadmap targeting multiple milestones, each backed by a supporting rationale, with the intent of achieving the company’s overall growth objective.
We began by reviewing the company’s then-current business-for-acquisition desirability along with its customer growth potential. Included was an analysis of their business lines at that time, including market-penetration possibilities. We then recommended customer and capability diversification, complete with market interest and value metrics. We also recommended target revenues, EBIT goals and an optimal profitability mix, keeping in mind the ideal percentage of prime versus sub-contracts. We also made recommendations for potential bolt-on acquisitions, after analyzing market segments and capabilities, company profiles and potential targets.
Results
After providing the company with a strategic growth-to-exit roadmap in 2013, growth[period] was retained to help the company execute the plan. By 2018, the company’s revenue had grown to more than $300M, well exceeding the initial goal of $250M in revenue. With our assistance, the company implemented many of the plan’s recommendations, including building out its strategic capabilities and strengthening its position as a key player in the market. The company established a contract-and-pipeline mix that increased its valuation and helped to successfully move it into new markets. It also successfully executed the bolt-on acquisition of a company which growth[period] had identified in the growth-to-exit plan. Post-acquisition, the two companies integrated their services businesses, resulting in the expansion of both companies’ capabilities to provide and enable real-time situational awareness worldwide. The company also created an ultra-successful business development department which led to profitable contracts and made the company extremely desirable to potential buyers. And, indeed, in 2018, the company successfully partnered for future strategic growth with New Mountain Capital. growth[period] continues to be retained to assist with future growth.
