Focusing on profit and leadership brought buyers to business strategy consulting firm, Easton

Download Case Study [PDF]

You may need to install Adobe Reader to read this case study

Founded in 2000, Easton Associates, a consulting firm, provides product and business strategy for companies in the life sciences industries. In 2009 Easton approached Equiteq asking for help getting a business valuation and market risk assessment.  Equiteq valued them at $5m but by helping improve leadership, sales and marketing, they helped grow profit.  Business value increased to between $12-$15m. Easton sold to Navigant for $15m in 2012.

The client's situation

Easton was a consultancy on the up, but it was struggling to convert sales into revenue and profit. The ambitious leadership team was keen to rectify this and turn the business into a thriving consultancy that had a true handle on its bottom line and was worth something on the M&A market. They asked Equiteq to help.

At Easton we were expert at advising life sciences and healthcare clients, but were out of our comfort zone when it came to valuing our own firm. So, when we wanted to review our market options, Equiteq’s deep knowledge of consulting M&A and advice on how to de-risk our assets was exactly what we required. Equiteq helped us strengthen our business in key areas. At the end of a two year process, our profits were up by almost 300%, and we sold to Navigant for $15M.

Kris Lowe Managing Director

Our approach

When Equiteq first came on board, Easton had five partners. To improve decision-making and make progress, Equiteq helped the team re-structure and Easton appointed a chief executive officer. She was charged with and bonused upon delivering a new profit target.

Easton used Equiteq’s 8 lever ‘Equity Growth Wheel’ to help them introduce best practice in driving sales and profit growth, improving intellectual property, and formalising sales and marketing processes.

Turning sales into revenue and profit was a key priority, and Easton needed to put consistency around their sales and business development processes and to make staff more accountable for delivering targets. Gross margin targets were set in line with capabilities and incentive bonuses offered on delivery.

Elsewhere, building value into a ‘people’ business, where, in theory, your intellectual property is in people’s heads and on laptops, requires a unique approach. Equiteq helped Easton build detailed market propositions and put rigour and process around how they captured and recorded their valuable intellectual property.

How did this deliver value to the client?

EastongrowthwheelEaston made rapid progress over a two year period using the ‘Equity Growth Wheel’, with a specific focus on Sales and Profit Growth, Market Proposition, Intellectual Property and Management Quality

Equiteq supported Easton in:

  • re-structuring their leadership team to provide better clarity and focus
  • growing revenue by 37% - from $9.5m to $13m in two years
  • growing profits from $650k to $2.5m – a rise of 280%

Easton’s valuation grew by $10m in two years.

The EBIT value of the firm started at 4 but reached a multiple of 7.5 at the end of the engagement.

Read more about our health practice