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Apuntes del Cenes

versão impressa ISSN 0120-3053

Resumo

LIEPERT, Maximilian. Increasing EBITDA by Optimizing IT costs for Private Equity Portfolio Companies. Apuntes del Cenes [online]. 2024, vol.43, n.78, pp.77-98.  Epub 31-Jan-2025. ISSN 0120-3053.  https://doi.org/10.19053/uptc.01203053.v43.n78.2024.17259.

The purpose of this study is to examine how private equity firms can increase the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of their portfolio companies through IT cost reduction strategies. A collective case study approach was used along with quantitative data collection schemes. The collective case study provided the advantage of making comparisons across various companies through replication. The quantitative research design allowed for the collection of quantitative data focusing on the performance of the three firms, namely Vista Equity Partners, the Blackstone Group Inc. and CVC Capital Partners. Five key measures were applied, i.e., margin expansion, capital expenditure (CAPEX), capital efficiency, working capital efficiency and mean adjusted change. The IT cost reduction strategies serve as value creation schemes that accentuate the EBITDA in the divestment context of private equity firms. The strategies reduce and eliminate waste, with a primary focus on optimizing being IT costs.

JEL classification:

F38, D24, M15, E22, O16.

Palavras-chave : cost reduction strategies; financial performance; profit margin enhancement; corporate finance; IT cost control.

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