Creating value

Cinven helps successful, high-quality companies move to the next phase of their growth, drawing on the expertise of our six sector teams using our proven value creation strategies. Many of the companies that we target face challenges. Some require injections of capital or management expertise; others need to restructure their operations to improve efficiency, or take on greater scale to help them compete in global markets. We frequently strengthen management teams - sometimes by bringing in additional managers with specific skills - or change the reporting structure to increase focus and accountability.  

While we may consider other options, the main value creation strategies Cinven applies, often in combination, are:

  • focus on the core business: redirecting the company's resources to focus on its strengths;
  • business roll-out: further growth and development of the business in its existing markets;
  • industry consolidation: acquiring and merging related businesses to strengthen their competitive position;
  • strategic redirection: refocusing the business strategy to benefit from changing market trends; and
  • new market expansion: seizing opportunities presented by the opening up and development of new markets.

Cinven is an active owner. After an acquisition is completed, we review the business with the management team and create a detailed post-acquisition plan. This sets out the agreed strategy in full, including initiatives, milestones, key performance indicators (KPIs) and responsibilities. Whilst the management team is responsible for daily operations, Cinven executives join the board and remain intimately involved in the areas of strategic direction and value creation.

Cinven’s Portfolio team has an active support role and works alongside our deal teams and board representatives. The combined Cinven team works together with our portfolio companies in the following areas:

  • revenue growth initiatives: increasing revenues by helping our companies establish themselves in international markets, including Asian markets;
  • operational optimisation initiatives: increasing efficiency and reducing costs, thereby boosting profit margins;
  • sharing best practice: cross-portfolio sourcing initiatives, the sharing of knowledge around common commercial practices and the identification and use of consultants; and
  • new investment opportunities: using our emerging markets expertise to create a strategic road map for new portfolio companies that we can act on from the outset, helping to position Cinven as a partner of choice, and building operational optimisation into the investment strategy from the beginning.

At Cinven, we aim to create real growth in the businesses we acquire. We use EBITDA* to measure our success, because it captures changes in company revenues and profit margins. Approximately two thirds of the value created in Cinven's fully realised investments since the first Cinven fund was launched is attributable to growth in EBITDA*. Higher revenues accounted for just under two thirds of this profit growth, with the remainder due to increases in margins.

*EBITDA: earnings before interest, taxes, depreciation and amortisation.

creating value EBITDA chart

Note: Includes realised investments in Funds 1, 2 and 3 which have created value. EBITDA arising from significant acquisitions by portfolio companies has been excluded from “EBITDA growth” as have piecemeal divestiture strategies.