10 WAYS IT

IMPACTS VALUATION

INDUSTRY INSIGHT

BY GEORGE FLOREA

MANAGING DIRECTOR,

RKON PE SERVICES

Unlocking IT Complexity

  • Fast delivery of managed IT infrastructure and security, ensuring;

  • compliance, cost predictability, and enhanced performance for high-growth;

  • PE portfolio companies;

  • Rapid execution of (IT infrastructure) carve-outs to meet TSA deadlines;

  • Unlocking cybersecurity compliance complexity in 60 days

Execute Key Outcomes for Private Equity

IT can get in the way of valuation potential without the right partner. RKON leverages over 10 years of experience as a full IT transaction life-cycle partner for high-growth mid-market companies. RKON is an all-in-one transformation partner capable of rapidly executing transition goals, including optimizing performance, maintaining ongoing operations while making improvements, and ultimately creating flexible and portable exit options. RKON excels in execution throughout the entire life cycle.

Our experience has shown that mid-market companies struggle with turning infrastructure technology into a competitive

advantage. When security and operations are added, the result is often an IT department that is reacting to problems and

not executing strategic value. RKON excels at managed infrastructure and security to enable your portfolio company to

focus on growth.

RKON's Proven PE Value

Constructing a team for diligence, planning, and design that also has the ability to focus on short-term, intense analysis and can convert abstract detailed processes into a meaningful strategy is key to success. So is profiling our consultants to know who’s best suited to handle the stress and pressure of these projects; which creative thinkers are available to overcome unforeseen obstacles; and who can avoid all the distractions to finish the migration and ensure that the TSA can be exited.

EXAMPLE 1

Carved-Out a Business Unit from a $50B Company

RKON was hired to provide full interim IT leadership to

design, migrate, and host fully functioning IT on the RKON

RVI cloud in 90 days. RKON maintained security and

network operations management for over 1,500 employees

until it was transitioned to a new buyer.

10 WAYS IT IMPACTS THE VALUATION OF PE PORTFOLIO COMPANIES

1. Cybersecurity gaps pose a risk to reputation, revenue and (unpredictable) costs.

 

2. Non-compliance is often unpredictable and creates large-scale remediation projects on an inability to acquire new customers.

 

3. Cost optimization often eludes companies due to oversimplified cloud business cases, migration planning, and current asset utilization.

 

4. Costs increase and stakeholder experience decreases without skilled, tiered, & unified operations with tools and automation.

 

5. Lacking cost predictability and timely execution of strategic initiatives from late or slow IT creates valuation risks and unsteady cash flow.

 

6. For high-growth companies, a lack of agile infrastructure performance delays the execution of new strategic-growth initiatives.

 

7. Failing to access historical performance reports adds risk for a PE acting as a buyer or seller. Proof assuages fears and buoys value.

 

8. Acquiring personnel expertise in new technology, security, and operations is a mid-market challenge with places risk on cost and (new) revenue.

 

9. Maintaining personnel, evidenced by high turnover rates, adds risk, time, and cost and is an inevitability of acquisitions and mergers.

 

10. When standards-based IT infrastructure can be rapidly built upon or assimilated after a transaction, this IT portability adds transition speed and reduces cost and risk.

EXAMPLE 2

Rapid IT Performance Turnaround

A PE firm enlisted RKON services to provide IT leadership

to rapidly resolve excessive IT downtime, which prohibited

productivity and financial reporting. RKON stabilized the

systems with a remediation plan in two weeks and then

upgraded the environment to a next-generation, high-performing infrastructure for long-term stability, which

culminated in an IPO.

EXAMPLE 3

Multinational Carve-Outs and Life-Cycle Partnership

RKON transitioned business and financial applications in

90 days to the RKON RVI cloud during the carve-out of a

company with over 3,000 employees. Though RKON was

brought in two months into the TSA, we finished on time

due to the flexibility of the RKON (move as is) Cloud. After

the move, compliance and disaster recovery were added.

RKON's flexibility enabled further carve-outs from the

RKON cloud to new buyers, as well as merging new

acquisitions to the RKON environment.

EXAMPLE 4

IT Optimization and Security Compliance

in Preparation for IPO

RKON was brought in to resolve significant IT downtime

in a high-growth retail company with 100 locations. In 10

days, RKON migrated applications to the stable and

compliant RKON RVI cloud. IT strategic leadership was

provided to implement a suite of security and compliance

solutions in 60 days as well as serve as the primary

interface to compliance auditors.

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