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Pre-Exit SGaaS Private Equity

Pre-Exit SGaaS: a PE-Backed Business Services Group

A constructed scenario showing how Pre-Exit SGaaS, applied 12 to 18 months before a planned sale, removes the governance findings a buyer's diligence team would otherwise price against.

PE-Backed Business Services Group

Illustrative Engagement

Illustrative engagement. This is a constructed scenario showing how Pre-Exit SGaaS operates in the run-up to a sale. It does not describe a Marentis Labs client.

The situation

Picture a PE-backed business services group, around £180m of revenue across facilities management, workforce solutions and contract catering, held by a mid-market sponsor planning a sale in 12 to 18 months. The governance infrastructure was built to run the business, which it does. It was never built to withstand a strategic buyer’s diligence team, which is what it is about to face. Delegated authorities are partly undocumented, management information is structured for operators rather than for a board defending an equity story, and nobody has tested board composition or remuneration governance against what an acquirer expects to inherit.

None of this threatens the business. All of it hands a buyer’s diligence team quantified reasons to chip the headline price during exclusivity, when the seller has least leverage.

How the engagement works

The engagement begins with the Pre-Mortem Diagnostic applied to the exit itself: assume the deal has been chipped or has fallen over in diligence, then work backwards through every governance and capital-discipline failure that could have caused it. Each failure becomes a remediation item, ranked by deal impact.

The remediation phase then works through the inventory: delegation authority documented and board-approved, management information rebuilt to evidence the equity story, board composition and remuneration governance brought to the standard a buyer expects, and regulatory obligations mapped with gaps closed. The principal owns the board-facing work throughout; execution support handles the documentation load so the finance team can keep running the business.

In the final phase, the Red Team Protocol runs a shadow diligence exercise: the data room and the equity story are attacked with the questions a buy-side team and its advisers will actually ask. Whatever fails is fixed before the process launches, and the board receives a Board Assurance Ledger mapping every identified exposure to its completed remediation evidence, so directors can answer buyer questions from a position of knowledge.

The position this leaves the board in

The engagement is built to one end: when the buyer’s diligence team arrives, it finds a documented governance position rather than a remediation backlog, and the seller keeps the leverage. On a £200m asset, a single 3 per cent price chip at exclusivity is £6m. The purpose of the work is to remove the reasons that chip gets issued.

This is a constructed scenario showing how Pre-Exit SGaaS operates. It does not describe a Marentis Labs client. To test the approach against your exit timetable, schedule a confidential call.