Pre-Exit SGaaS: Exit Value Defence

The Gap a Buyer Will Price Against

A sophisticated acquirer pays for future cash flows, discounted at their cost of capital. They apply empirical fade rates to estimate how quickly returns above the cost of capital regress toward the mean. The faster they can justify the fade, the lower the value they underwrite.

Strategy, customer willingness to pay, scale, and barriers to entry set the underlying economics, the length of the competitive advantage period, and the multiple. Governance determines whether a buyer can find a pretext to shorten that period. When a diligence team finds zero-rate-era hurdle rates still in use, an unhedged floating-rate facility, thin covenant headroom, an unmapped data-protection exposure, or no board-level challenge to the equity story, it has a quantified reason to underwrite a faster fade and chip the price during exclusivity, when the seller has least leverage.

Pre-Exit SGaaS closes those gaps in advance, so the headline price survives diligence intact.

Remediation Before the Buyer Arrives

The Big 4 VDD model assesses what is broken and hands the report to the buyer. Pre-Exit SGaaS identifies the issues and helps the PortCo management team fix them before the buyer ever sees them.

What Pre-Exit SGaaS Delivers

We frame each output around what a buyer will scrutinise and what it defends:

• A governance maturity diagnostic, MRMM-scored at baseline and re-scored at close to evidence the remediation.
• A capex and bolt-on governance proof-book, a documented audit of the project models, hurdle logic, and approval governance that authorised the PortCo’s historical capex and bolt-on programme. By 12–18 months out the capital programme is largely locked, so the proof-book demonstrates that past growth investment was governed with discipline, protecting the credibility of the forward EBITDA run-rate the equity story rests on. It is a governance audit of how capital decisions were made, complementary to the accountants’ financial quality-of-earnings work.
• A board composition review assessing skills, independence, and tenure against what an incoming buyer expects.
• A risk framework uplift covering appetite, controls, and reporting that withstand buy-side challenge.
• A regulatory readiness assessment delivering sector-specific gap closure against the obligations a buyer inherits.
• A board reporting suite of decision-grade papers and dashboards that evidence a functioning board.
• A buyer-ready data room with governance evidence organised to pre-empt diligence enquiries.
• A Board Assurance Ledger, an internal assurance memo prepared strictly for the PortCo board and sponsor, mapping every identified governance, regulatory, and treasury exposure against its completed remediation evidence, so the board can answer buy-side Q&A from a position of knowledge. The Ledger is an internal readiness tool; Marentis issues no buyer-facing opinion, comfort letter, or reliance document.

How We Remediate

We attack governance and capital assumptions the way a hostile buyer will, then fix what fails.

The Marentis Risk Maturity Model™ sets the baseline across six dimensions: Board Composition, Risk Governance, Risk Culture, Framework and Control Design, Monitoring and Reporting, and Regulatory Alignment. We re-run it at close to evidence progress. We apply the Pre-Mortem Diagnostic™ to the exit itself, assuming the deal has been chipped or has collapsed in diligence, then working backwards to find every governance and capital-discipline failure that could have caused it. The Red Team Protocol™ stress-tests the equity story and the data room against the questions a buy-side team and its advisers will ask, and we fix the weak answers before exclusivity begins.

Delivery

A structured engagement, intensive at the front, with a documented hand-back. Owen leads every phase, personally owning each strategic milestone, board challenge session, and buyer Q&A rehearsal; vetted transaction-support associates carry the commoditised execution, reserving the principal’s time for the work a buyer’s board credits. An accelerated variant runs where the sponsor moves on a shorter runway.

How Pre-Exit SGaaS Stays Independent

The engagement is retained by the seller and stays independent of the portfolio company’s management. Owen works alongside management, the PE sponsor’s value-creation team, and the other advisers preparing the exit, with the independence the challenge depends on preserved contractually.

Boundaries and Liability

Pre-Exit SGaaS is governance advisory. It sits outside vendor due diligence, financial quality-of-earnings work, and regulated corporate-finance, deal-structuring, and fairness-opinion work; where a question touches regulated activity, we refer the client to its corporate-finance adviser or counsel. Every deliverable is an internal tool for the seller’s board, and Marentis issues no opinion, comfort letter, or reliance document to a buyer or its advisers. Engagements run under an engagement letter carrying professional indemnity cover and a liability cap, confirmed before work begins. The work involves material non-public information; we operate under NDA, observe information-barrier discipline, and comply with the client’s insider-list and market-abuse obligations throughout.

Commercial Structure

Three components, each a recognisable transaction cost: a fixed diagnostic fee for the four-week assessment, a monthly remediation retainer through the engagement, and a flat transaction success fee payable only on completion of a change of control. We take no share of enterprise value uplift and no governance-percentile gain-share. A sponsor will not attribute a subjective valuation gain to governance work, and the attribution is unprovable, so we removed those mechanisms permanently.

The success fee is binary and never substitutes for the base fee. The diagnostic and retainer are payable whatever the exit outcome, so the client receives full delivery whether or not the deal closes. Where Owen holds a concurrent Embedded or Retained role at the same company, he does not take the success fee, to preserve independence. We quote specific terms after the initial scoping conversation.

Where a deal is paused or aborted, the following can be available to clients:

• Aborted Deal Protection. If the sponsor decides to pull the asset from the market or pause the exit process after Phase 3 is completed, the Transaction Success Fee is deferred.
• Maintenance Cadence. The contract automatically transitions to a Governance Maintenance Retainer, priced at 30–40% of the active Phase 2 retainer, to ensure the completed remediation fixes do not decay during the delay.
• Process Relaunch. When the sponsor reactivates the sell-side process, typically within 6–12 months, Marentis reactivates the full Phase 4 protocol for a rapid 4-week update fee, preserving the eventual success fee alignment upon closing.

When Pre-Exit Applies

• PE portfolio companies 12–18 months from a planned exit (sale, IPO, or secondary).
• Where a governance or capital-discipline gap could create diligence friction, negotiation drag, or a material price chip during exclusivity.
• In high-regulation, high-scrutiny sectors such as financial services and asset management, insurance and InsurTech, healthcare services, and enterprise data and SaaS.
• Where the buyer will apply a rigorous governance diligence standard, such as a strategic acquirer with a regulated parent, sovereign or pension capital, or a sponsor with institutional governance requirements.

The Entry Path

For PE portfolio companies, the typical path is Diagnostic → Pre-Exit, or Retained → Pre-Exit where the retained relationship pre-dates the exit timeline. A Diagnostic at entry builds the institutional knowledge that makes the Pre-Exit engagement fast and credible. Where Retained or Embedded engagement is already in place, the transition to Pre-Exit preserves continuity rather than requiring a cold start.