EY Strategy and Transactions

Strategy services
In this transformative age, CEOs and business leaders are challenged in how they can achieve maximum value
for their organization. EY-Parthenon’s teams, in collaboration with broader Strategy and Transactions teams,
challenge assumptions and help create strategies for the clients to grow, optimize their portfolios and improve
profitability.

What EY can do for you

As experienced advisors to the C-suite, EY-Parthenon helps you answer:
 How can I seize growth opportunities and competitive advantage?
 What are the appropriate revenue and profitability targets for my business to achieve its full potential?
 How can I better anticipate and adapt to digital transformation?
 How can I win the competition for capital?

Growth strategy
We advise clients on developing strategic opportunities by providing in-depth market, competitor and customer
insights. Our growth strategy capabilities include:
 Corporate strategy
 Portfolio and business unit strategy
 New market growth opportunities
 Strategic business model evaluation

Optimisation strategy
We help companies implement strategic plans by leveraging financial and operational perspectives across their
organization. Our optimization strategy capabilities include:
 Digital transformation strategy
 Route-to-market design
 Pricing optimization strategy
 Customer segmentation
 Sales and marketing effectiveness

Transaction strategy
We help our clients realize their full potential through fast-tracked, better-informed decisions across the whole
investment life cycle, from strategy through exit. Our transaction strategy capabilities include:
 M&A strategy
 Commercial diligence (buy-side)

Capital allocation strategy

We help our clients develop a capital allocation strategy that is well thought through and aligned to their overall
business objectives.
Corporate finance solutions
Our corporate finance solutions team helps corporates, private equity, governments, sovereign wealth funds,
private and family businesses, and educational institutions with their key financial issues. From portfolio review
and capital allocation processes to financial planning analytics and decision support, we have the people,
analytics and tools to help you better allocate capital.

What EY can do for you

Our team helps you manage your risk/return trade-offs to support you with better decision-making around
financing and capital efficiency.

We offer deep insights to help you get answers to:

 How do I know I have the right asset mix?
 How do I know I am funding the right projects?
 How do I predict my future financial performance?
 How can my investment and tax strategy help futureproof my business?
 How do I best fund my capital investment decisions?
 How can I increase investor confidence?

We offer the support you need to achieve your objectives across the following areas:

Corporate finance strategy

We can help you address key business issues through rigorous financial, economic and data analytics.
 Review, enhance or build capital allocation processes
 Provide independent analysis to help optimize the portfolio
 Employ data analytics and predictive modelling to solve financial problems, facilitate decision making
and achieve better business outcomes
 Analyze the impact on value and risk of alternative complex transaction structures
 Analyze the impact on value and risk of alternative capital structures
 Analyze the accretive or dilutive characteristics of your business units or assets
 Bridge your strategic and operational imperatives by employing our leading-class business modelling
capabilities

Capital allocation services

We help our clients develop a capital allocation strategy that is well thought through and aligned to their overall
business objectives.

Economic advisory
We can help you improve economic strategy, forecast more accurately and better manage your commercial and
capital decisions.
 Economic impact assessment and cost benefit analysis
 Macro-economic analysis and assessment of scenarios
  Econometrics and pricing strategy
 Demand forecasting and price elasticity estimation
 Predictive modelling for customer behaviour
 Margin analysis and unit economics

Fairness opinion
EY teams provide fairness opinions to boards of directors, special committees and other fiduciaries in
connection with mergers, acquisitions, divestitures and other material transactions. By analyzing the financial
aspects of a transaction, we help our clients fulfill their fiduciary duties and make better decisions.

Forecasting and scenario planning

COVID-19 has upended customer demand and supply chains, as well as historical forecasting methods.
Companies often lack the processes and tools to make rapid decisions to address these changes.

Infrastructure advisory – corporate and government

For large-scale infrastructure projects and programs, we advise both public and private sector organizations on
issues related to:
 Financial
 Procurement
 Strategic
 Public-private partnerships (PPP)
Our wide range of advisory services includes support from the earliest stages of analysis, from project
evaluation to procurement, financial close, construction and operations. We can assist our clients in devising and
comparing financial plans and delivery approaches for projects that involve public, federal or private financing,
project revenues and/or grants — and provide support to our clients in their implementation of those plans.

Investment strategy
We can provide you with an independent opinion as to whether the price to be paid or received in a transaction
is fair from a financial point of view. In doing so, EY professionals can help you address the following
important questions:
 Will the transaction create or destroy shareholder value?
 What is the value of the target assets or equity interests?
 How does non-cash consideration such as equity, seller notes, earnouts, options and other complex
financial instruments affect the transaction value?
 How do risks, synergies and other growth opportunities impact the transaction economics?
 Is the transaction accretive or dilutive?
 How do the transaction structure, tax attributes and contingencies impact deal value?

Valuation, modelling and economics

Our Valuation professionals perform high-quality valuations of companies and individual assets that recognize
the need for transparent and robust valuations which satisfy corporate, regulatory and accounting requirements.
In this environment, justifying the value of assets and liabilities has grown more complex and critical for most
businesses. Our experienced professionals bring excellence in accounting, taxation and financial due diligence,
providing integrated solutions that help clients make better quality decisions around value. We help clients
advance their strategic, financial and tax agendas through a combination of corporate finance and valuation
analyses.

Our Business Modeling professionals provide robust quantitative analysis and insight, while leveraging
advanced data science, mathematics and statistical skills, to provide robust, evidenced-based analytics to inform
our clients’ strategic and operational decision making around all elements of the capital agenda. Often reporting
directly to a company’s most senior executives, we enhance our clients’ understanding of costs, benefits,
uncertainties and risks to enable more confident, strategic decisions and judgements around capital allocation.
We employ tools and techniques to deliver predictive and prescriptive analytics, including the use of financial
modelling solutions. 

Building an effective business model, whether it‘s to evaluate a transaction, a new market opportunity or for
other strategic purposes, is a complex and difficult task. In addition, clients often place reliance on a business
model and require a degree of independent comfort that such business model is free from logical errors. Our
Business Modeling professionals also help clients carry out the model review, model support and model-build
activities our clients need to make key decisions and improve strategic outcomes.

Buy and integrate

We help enable strategic growth through better integrated and operationalized mergers and acquisitions, JVs and
alliances. In particular, we help companies refine their growth strategy, perform deal sourcing, conduct
diligence and valuation, and implement M&A integration.
What EY can do for you
Our clients enjoy the personalized attention of a full-service organization with access to broad intellectual
capital, extensive relationships and leading-class solutions to drive their growth strategies and fit their M&A
needs. 

We are one of the only major professional advisory organizations that offers fully dedicated multidisciplinary
transaction advisory capabilities. From strategy to execution, our services are underpinned by extensive
financial, tax, commercial and operational experience.

Our M&A technology leverages machine learning and artificial intelligence, robotics and process automation,
and data analysis and visualization. When combined with human insights, sector experience and functional
knowledge, this helps deliver better decision-making and accelerated results.

We understand that every type of deal is different, requiring bespoke integration approaches, priorities and
operating models. Our teams can help you understand what business to buy, how to value it and how to integrate
it into your company.

Growth strategy
Helping you find the path to grow your business:
 Corporate and business unit strategy
 Portfolio strategy
 New market growth opportunities
 Strategic business model evaluation

M&A deal sourcing and origination

 Identify and assess strategic fit of an acquisition target, JV or alliance partner
 Offer guidance to help access debt and equity capital
 Provide independent perspective on deal terms

M&A diligence and valuation

We conduct diligence in the following areas to enable you to choose the right target at the right price.
 Commercial  Regulatory
 Financial risk  Cyber
 Human resources  Valuation
 IT  Transaction tax
 Operations and synergies

M&A Integration
We use a structured approach to help you integrate a target successfully and maximize deal value.
 Integration management office (IMO)
 Value creation and synergy identification
 Day One readiness
 Business processes and functional integration
 Change management and communications
 Sales and marketing effectiveness

Connected Capital Technologies

M&A tools to help deliver better decision-making and accelerated results.
 Strategy diagnostics
 Big data, ecosystem mapping, and analytics
 Artificial-intelligence-powered data capture and interrogation
 Financial and operational diagnostics
  Collaboration portals

Sell and separate

Enabling strategic portfolio management and better divestments that help you improve value from the sale of an
entire company, carve-out, spin-off or joint venture. Our strategic portfolio management advice helps you
decide what and when to monetize. We execute across the entire divestiture life cycle, including strategy,
separation and stabilization upon deal closing.

What EY can do for you

We offer the support you need to help achieve your divestment objectives. Our diverse divestiture teams help
deliver full value from a divestiture, whether you are a corporate or a private equity fund, as we help you limit
disruption, manage remaining cost structures and allow you to focus on future inclusive growth.

We help enable management to craft the value story and deal model, market the business to buyers, optimize tax
attributes to buyer and seller, prepare carve-out financials and develop operational separation plans.

We offer deep insight to help you get answers:

 What should I sell to reposition my business in the market?
 How can I sell assets at optimal prices?
 How can I optimize my divestment strategy to raise capital for future investments?
 How can I sell non-core assets to preserve capital and help digitally transform my business?

Portfolio strategy, optimisation and management

We help clients assess their portfolio of assets, including strategic fit, underlying value, and contribution to the
overall business and transaction alternatives.

Presale diligence
We prepare financial, tax, HR and operational information based on the understanding of the buyers’ needs and
priorities with the use of advanced analytics — the transformation of strategic, financial or operational
algorithms combined with complex data sets into information, facilitating better, faster and more decisive
actions.

Transaction analytics
We help you unlock the power of big data to support your capital allocation strategies at speed and scale.

Equity story development

We help you develop a compelling equity story for buyers and determine valuation.

Tax structuring
We help you understand the tax position and tax structuring alternatives to increase after-tax proceeds.

Preparation of deal basis and auditable financials

We assist with technical carve-out financial statement matters and support the audit process by assisting with
U.S. Securities and Exchange Commission (SEC) reporting matters and regulatory filings, and bridging the
audited financial statements to the deal-basis financial statements.

Negotiation and execution

We help prepare management for interaction with bidders and develop fact-based positions for purchase price
adjustments, closing schedules and transition service agreements.

Operational separation planning

We develop a separation road map for key functions, including finance, HR, accounting and IT, considering
regulatory requirements and tax planning.
Readiness assessment and day-one planning
We provide rapid assessment of financial, tax and operational risks and the critical considerations for day-one
readiness, including employee, customer and supplier retention, IT, and infrastructure.

Improvement of remaining business

We help you manage the remaining cost structure so you can focus on future growth, including opportunities to
invest in the core business, reduce leverage and improve working capital.

Reshaping results
Fast impact. Sustainable results.
We help you respond to the challenges of COVID -19, providing trusted leadership in these urgent, critical and
complex situations to help you recover and preserve value for a better future.

What EY can do for you

We deliver solutions at pace. Whether you are a public or private company, government institution, investor or
financial stakeholder, we work closely with clients with a focus on execution to transform financial and/or
operational performance from value recovery, preservation and through to value creation.

We offer deep insight and practical on-the ground support to help you answer:
 How can I establish an effective COVID-19 Crisis Management team to get more control of the
situation?
 How can I build and secure liquidity, managing the impact of disruption between finance and
operations?
 How can I get more visibility on potential business risks arising from COVID -19 and give clear
recommendations for action?
 How can I protect business continuity?
 Who can help me develop options for a rescue or recovery plan; then help me find capital to support it
and negotiate with my stakeholders?

We offer the support you need to achieve your objectives:

Value recovery
Contingency planning and insolvency solutions
Most restructurings need a “Plan B” — whether as a contingency plan to provide comfort for directors and
stakeholders or, alternatively, for financial stakeholders to create a credible “stick” to break the deadlock and
help all parties reach a consensual deal. In particularly challenging situations, when directors and businesses are
facing increasing risks and challenges to continued trading, we create the time, space and environment to
develop and deliver the right solutions.

We work with management and financial stakeholders to use the pace, protection, powers and flexibility
available under insolvency laws to address the issues threatening a business’ survival. We use contingency
planning and insolvency solutions to create restructuring legacies by increasing the chance of a consensual
restructuring through a credible “Plan B,” delivering a rescue that could not otherwise be achieved, preserving
and recovering value, stabilizing critical services, and protecting jobs or by providing a controlled exit.

Simplifying your corporate structure

Group structures can become increasingly complex through M&As, JVs and organic growth. This can lead to
increased costs, as well as difficulties managing risk, simplifying operations, improving transparency and
complying with changing regulations.

We have experience supporting the complete spectrum of organizations, whether large multinational companies
seeking to reduce their global entity footprint, or a small domestic organization looking to remove a single entity
from its structure for a specific purpose. Our team integrates restructuring, tax and financial consulting
knowledge to help organizations assess, rationalize and simplify their legal entity structures across the following
key phases of corporate simplification: setup, group complexity analysis, program management, due diligence,
and issue resolution and entity eliminations.

Value preservation
Improving liquidity and working capital
The adage that “cash is king” is more relevant today than ever. Dynamic and disrupted markets, geopolitical
uncertainty, and ever-growing corporate transparency are putting increasing pressure on companies’ liquidity
and cash flows. Many management teams struggle to sustain good control over short-term cash flows and the
working capital that drives them, leaving the business vulnerable to market and operational changes.

We have experience supporting the complete spectrum of companies, whether a successful business seeking to
enhance shareholder value or an organization experiencing a cash crisis. We help you develop the three main
ingredients of strong working capital management: identification of cash-generating opportunities, cash flow
forecasting, and visibility and control through our advanced digital analytical techniques.

Leading the restructuring/turnaround

Restructuring or turning around an organization brings many challenges on top of the daily demands of running
a business, for example: managing competing agendas, creating time to develop options, knowing which option
is the right one when information may be imperfect and executing decisions at pace to maintain stakeholder
support in a stressed environment.

We create understanding, alignment and support with internal and external stakeholders. We focus on actions
that help to deliver transformational outcomes and can provide interim management solutions to help you
deliver results.

Preserving stakeholder value

Stakeholders are asked to respond quickly when businesses underperform, or suffer liquidity shortfalls or value
erosion. We help provide support in a rapidly changing environment when information is incomplete, agendas
no longer align and confidence is reduced.

We work with all stakeholders to preserve, create and realize value through restructuring advice, critical
appraisal of a company’s ongoing viability, stakeholder intermediation, options analysis and entity priority
analysis.

Debt restructuring, raising capital and M&A

Preserving value for a company and its stakeholders often requires a reshaping of the capital structure and assets
in the portfolio. This is often achieved by a combination of financial restructuring and liability management,
together with M&A activities to dispose of non-core assets and potentially source new equity. EY professionals
are experienced in helping you analyze, structure, negotiate with stakeholders and execute the best possible
solution.

In the USA, Ernst & Young Capital Advisors, LLC (EYCA) is a registered broker-dealer and member of
Financial Industry Regulatory Authority (FINRA: finra.org) and offers investment banking services with access
to EY debt restructuring, M&A, debt capital markets and equity capital markets professionals across the globe.

Value creation
Rapid performance improvement
Most businesses are likely to experience operational challenges and underperformance at some point. While the
root causes can be buried, the negative impact can be highly visible — profit warnings, declining performance
metrics, failure to achieve project milestones, loss of customer contracts or management departures.

Whether a business is in crisis or is simply facing an operational challenge, our team is experienced in helping
management teams identify and prioritize the most critical issues, stabilize the business, establish a leadership
and stakeholder consensus around the solution, and deliver tangible results quickly.
Private equity value creation
Our hands-on value creation leaders help PE companies (and sponsors) deliver their investment case by
accelerating cash and profit improvements, from ideation to results. We prioritize our involvement to focus on
situations we know best: complex carve-outs, functional transformations, and instances of stress or distress.
EY-Parthenon Strategy and Transactions

Corporate and growth strategy

EY-Parthenon teams help develop and deliver strategic opportunities for clients by providing in-depth market,
competitor and customer insight — incorporating financial, operational and implementation perspectives across
their entire organization.

What EY-Parthenon can do for you

EY-Parthenon teams can help business leaders and CEOs answer the following questions:

 What is your full-potential value and are you realizing long-term value?
 What growth opportunities exist in your core business?
 Is now the time to evaluate, prioritize and pursue adjacencies to optimize growth?
 In this time of volatility, are there transformational growth opportunities you should be considering,
including both organic and inorganic paths?
 What is your business strategy in the digital world?
 What are the right channels for your product or service, and what’s the best way to get into those
channels?
 How well do you understand your customer’s needs and priorities, and what are you doing to address
them?
 Are you getting the optimal return on investment (ROI) for your sales and marketing spend?

The corporate and growth strategy EY-Parthenon professionals have experience in the following areas:

Corporate and business unit strategy

EY-Parthenon professionals utilize data-rich analyses such as competitive analysis and economic forecasting,
market sizing and customer perspectives into actionable and successful growth strategies in today’s
everchanging and increasingly challenging landscape.

Purpose-led strategy and long-term value

EY-Parthenon professionals help clients define their purpose and translate it into action—by putting it at the
very core of their strategy— in order to generate sustained, profitable growth and long-term value.

Business model reinvention

EY-Parthenon professionals help clients reimagine their future success and transform their businesses to meet
the needs of their markets.

Portfolio strategy
EY-Parthenon professionals help clients understand the role and potential of different business units and advise
them on how to optimize their portfolios, including identifying opportunities for acquisitions and potential
divestitures.

New market entry opportunities

EY-Parthenon professionals help clients explore new market opportunities such as the expansion into new
geographies, the identification of new channels, the targeting of new customer segments, or even the creation of
new product categories. They then explore what gaps clients need to fill to fully capture that market opportunity
and evaluate the most efficient ways to fill those gaps.

Digital transformation strategy

Digital is more than just a website or a marketing channel — it’s the backbone of a business and affects the
entire operation. In today’s world, change is the only constant: changing customer needs, evolving technologies,
disrupted value chain and fluctuating markets. EY-Parthenon professionals help clients navigate these changes
and help them build a business strategy for a digital world.
Go-to-market strategy
EY-Parthenon professionals assist clients in developing a detailed action plan for reaching target customers and
achieving competitive advantage in the market.

Operational and IT diligence

EY-Parthenon professionals critically evaluate a target’s attractiveness through an assessment of their
operational and IT infrastructures. They focus on the key issues that may affect the overall business case by
analyzing stand-alone and stranded costs, examining efficiencies and developing fact-based positions for future-
state operating models, determining optimal transition service agreements (TSAs), and helping prepare
management for negotiations.

Commercial diligence (buy side)

Using data-driven analysis, including the capabilities in primary and secondary research, and econometric
analysis, EY-Parthenon professionals support clients’ diligence process by evaluating the attractiveness of a
target’s industry, assessing its competitive position and opportunities for growth, understating its current and
potential value proposition for its customer, and providing key input into valuation models.

Vendor due diligence (sell side)

EY-Parthenon professionals assist clients in the exit phase of investment by articulating a portfolio company’s
strategic position, future growth opportunities, and full potential long-term value.

Transaction strategy
EY-Parthenon teams can support you with the development, evaluation and end-to-end execution of your
transaction strategy. They work with you as you assess and prioritize investment and portfolio optimization
opportunities and identify targets to help achieve full potential.

What EY-Parthenon can do for you

EY-Parthenon teams can help business leaders and CEOs answer the following questions:

 What is the role of M&A within your growth and portfolio strategy?
 Have you performed the necessary due diligence to ensure you are making the best transaction
decisions?
 How can you achieve maximum value and reduce risks through transaction execution?
 Are you prepared for the challenges of merger integration?

EY-Parthenon transaction strategy professionals have experience in the following areas:

Operational and IT diligence

EY-Parthenon professionals assist clients with critically evaluating a target’s attractiveness through an
assessment of their operational and IT infrastructure. They not only offer an early identification of the
operational issues affecting a business case but also identify opportunities for post transaction value creation.

Commercial diligence (buy side)

Using data-driven analysis, including the capabilities in primary and secondary research, and econometric
analysis, EY-Parthenon professionals support clients’ diligence process in evaluating the attractiveness of a
target’s industry, and assessing its competitive position and opportunities for growth.

Vendor due diligence (sell side)

EY-Parthenon professionals assess clients in the exit phase of investment by articulating a portfolio company’s
strategic position and future growth opportunities.

Integration strategy planning and execution

EY-Parthenon professionals help clients through the development of an integration strategy, identification of
synergies and value creation opportunities, development of combined commercial and operating model, and
development of an integration master plan. They also help clients execute the integration process, realize and
track synergies and manage communication and change throughout the integration process.

Divestiture strategy planning and execution (DivestCo and RemainCo)

EY-Parthenon professionals support the development and execution of separation plans to reduce disruption to
the ongoing business and disentangle complex areas — including customers and contracts, legal entities, IT
infrastructure and applications, supply chain, finance & accounting and human resources. EY-Parthenon
proprietary leading practice tools provide a robust platform to help manage your transactions in a coordinated
manner.

Operational and IT separation

EY-Parthenon professionals help clients separate people, processes, IT systems, assets, contracts and legal
entities. We focus on key value drivers, during the sale or spin-off of a business unit, division or entire entity.

Restructuring and turnaround strategy

Today’s disruption will require organizations to reshape. Strategic change focusing on financial and business
restructuring or turnaround must be implemented with speed and certainty. We provide trusted leadership in
critical and complex situations to transform, create, preserve and recover value.

What EY restructuring and turnaround strategy teams can do for you:

As part of EY-Parthenon, our financial and business restructuring professionals support EY clients, from design
to delivery, focusing on practical solutions that yield measurable results.

Organizations across the globe are facing an unprecedented array of challenges. These threats come in many
forms whether they be weakened balance sheets, uncertainty over COVID-19 recovery curves, challenges of
operating in a virtual environment, macroeconomic or geopolitical changes, competitor innovation or changing
stakeholder expectations.

When time is important, our experienced problem-solvers provide restructuring advisory to move quickly from
ideas to implementation. With access to an unrivalled bench of restructuring and turnaround professionals with
industry experience, our global reach and rapid local reaction teams mean that our professionals can be quickly
deployed wherever they are needed.

Connected globally, delivered locally and digitally enabled, our restructuring and turnaround strategy team is
supported by a broad range of EY tools and technologies. EY M&A tools: Connected Capital Technologies help
EY professionals deliver actional insights at a faster pace and deeper level than before, helping to ensure we can
provide value to our clients.

We can help you answer common turnaround and restructuring challenges including:

 How can I rapidly improve the financial and operational performance of my business?
 Who can help me develop options for a rapid turnaround, rescue, recovery or contingency plan; then
help me find capital to support it and negotiate with my stakeholders?
 Who can help me lead the restructuring, or offer interim management roles such as Chief Restructuring
Officer (CRO) or Chief Restructuring Advisor (CRA)?
 How can I make more informed decisions about working capital and liquidity management?
 Who can help me take an investor lens view to my portfolio evaluation?
 How can I reshape the business model through business redesign?
 How do I make strategic decisions in times of ambiguity and uncertainty?
 How can I ensure that my tax strategy will maximize value in my turnaround plan?
Contingency planning and insolvency solutions services
Most restructurings need a “Plan B” — whether as a contingency plan to provide comfort for directors and
stakeholders or, alternatively, for financial stakeholders to create a credible point of leverage to break the
deadlock and help all parties reach a consensual deal. In particularly challenging situations, when directors and
businesses are facing increasing risks and challenges to continued trading, we create the time, space and
environment to develop and deliver the right solutions.

We work with management and financial stakeholders to use the pace, protection, powers and flexibility
available under insolvency laws to address the issues threatening the survival of a business.

Corporate simplification services

Group structures can become increasingly complex over time, leading to increased costs and risks.

We have experience supporting the complete spectrum of organizations in simplifying their corporate structure.
Our team integrates restructuring, tax and financial advisory knowledge to help organizations assess, rationalize
and simplify their legal entity structures across the following key phases of corporate simplification: setup,
group complexity analysis, program management, due diligence, and issue resolution and entity eliminations.

Liquidity and working capital services

Especially in times of uncertainty and disruption, many management teams struggle to sustain good control over
short-term cash flows and the working capital that drives them, leaving the business vulnerable to market and
operational changes.

We have experience supporting the complete spectrum of companies, whether a successful business seeking to
enhance shareholder value or an organization experiencing a cash crisis. We help you develop the three main
ingredients of strong working capital management: identification of cash-generating opportunities, cash flow
forecasting, and visibility and control through our advanced digital analytical techniques.

Interim management: Chief Restructuring Officer/Advisor

EY can help with interim management acting as a Chief Restructuring Officer (CRO) and offering Chief
Restructuring Advisor (CRA) services. Restructuring or turning around an organization brings many challenges
on top of the daily demands of running a business, for example: managing competing agendas, creating time to
develop options, knowing which option is the right one when information may be imperfect and executing
decisions at pace to maintain stakeholder support in a stressed environment.

We create understanding, alignment and support with internal and external stakeholders. We focus on actions
that deliver transformational outcomes and provide interim management solutions, including offering a CRO or
CRA, to help you deliver results.

Preserving stakeholder value

Stakeholders are asked to respond quickly when businesses underperform or suffer liquidity shortfalls or value
erosion. We help provide support and communications in a rapidly changing environment when information is
incomplete, agendas no longer align, and confidence is reduced.

We work with all stakeholders to preserve, create and recover value through restructuring advice, critical
appraisal of a company’s ongoing viability, stakeholder intermediation, options analysis and entity priority
analysis.

Debt restructuring, raising capital and M&A services

Preserving value for a company and its stakeholders often requires a reshaping of the capital structure and assets
in the portfolio. This is achieved by a combination of selling non-core assets or business units to generate cash,
attracting new capital and rescheduling or retiring existing obligations. Our team is experienced in helping you
prepare proposals, obtain stakeholder support and execute the transaction.
In the USA, Ernst & Young Capital Advisors, LLC (EYCA) is a registered broker-dealer and member of
Financial Industry Regulatory Authority (FINRA: finra.org) and offers investment banking services with access
to a network of EY debt restructuring, M&A, debt capital markets and equity capital markets professionals
across the globe.

Rapid value creation services

Most businesses are likely to experience operational challenges and underperformance at some point. While the
root causes can be buried, the negative impact can be highly visible — profit warnings, declining performance
metrics, failure to achieve project milestones, loss of customer contracts or management departures.

Whether a business is in crisis or is simply facing an operational challenge, our team is experienced in helping
underperforming or stressed businesses to develop and implement operational strategies to drive rapid
performance improvement.

Private equity value creation services

Private equity (PE) firms are increasingly required to identify and deliver operational improvements to achieve
targeted returns.

Our value creation leaders provide hands-on support, from strategy to implementation, to help PE companies
accelerate cash and profit improvements and deliver their investment case. Our PE team has extensive
experience in complex carve-outs, functional transformations, and instances of stress or distress.

Non-performing loan services

Non-performing loans (NPLs) remain a challenge for banks, particularly in these times of economic uncertainty.

Our loan portfolio solutions team brings together experienced operators and deal advisors to advise financial
institutions about their non-performing loan portfolios and also the buyers of those portfolios, delivering value
through our breadth of knowledge and expertise.

Restructuring and turnaround tax services

At whatever stage an organization is on the performance curve, tax is an area that cannot be overlooked. Tax
strategies can have an enormous impact on your business recovery. When well managed they can be vital in
enabling a business turnaround, however when ignored they can eliminate options.

Whether your business is underperforming, stressed or distressed, our global network of tax professionals can
help you create, preserve or recover value. The global EY network combines local tax knowledge across a broad
spectrum of industry sectors, to help you make informed decisions and navigate the tax implications of all your
business-critical decisions.
BCG Corporate Finance & Strategy

Creating exceptional value in a world of rapidly shifting competitive advantage

Uncertainty is accelerating while the half-life of leadership positions and business models is shortening.
Winning in this environment takes two things: strategic insights into how the world is likely to change—and the
ability to create value from those insights before the game changes again.

Leaders need to answer critical questions:

 How will changes in technology, regulation, and geopolitics affect business economics, customer
priorities, competitive advantage, and the universe of possible strategic moves?
 Where, and with which business models, do we have the greatest right to win in the future?
 What is our value creation ambition and agenda?
 What is the best way to allocate capital—within the business portfolio, to transactions, and to
shareholder pay-outs—to realize that ambition and build the strongest business possible?
 Are our strategy and finance functions world class and able to sustain superior performance well into
the future?

How We Help Clients

In short, we help you be both a great company, driving growth and attracting talent, and a great stock, attracting
investors and delivering value for stakeholders.

Strategy and value creation are part of BCG’s DNA. Through the experience curve, growth-share matrix, time-
based competition, digital deconstruction, and our thinking on the growing diversity of strategic environments
in Your Strategy Needs a Strategy, BCG has been at the forefront of strategic innovation.

We partner with clients not just to develop strategies, but also to achieve superior results through support on
transactions and broader transformations. We help support functional excellence through our Center for CFO
Excellence and our Strategy Enablement Center. Explore the full range of our Corporate Finance and Strategy
consulting offering:

Corporate Strategy
Ensuring that the whole business portfolio is worth more than the sum of its parts takes a clear corporate vision,
a consistent parenting approach, smart capital allocation, and a compelling investor story.

Business Strategy
Delivering value-creating growth requires not only a sharp understanding of how the basis of competition is
shifting but also the creativity to envision your organization’s unique path to win—and the resourcing and
discipline to realize your vision.

Value Creation Strategy and Shareholder Activism Defense

Creating peer-beating value is a universal aspiration. The best companies maximize their results by taking an
iterative approach to shaping corporate, business, financial, and investor strategies. And strong, sustained value
creation is the best defense against the rising tide of activism.

M&A, Transactions, and Post-Merger Integration

Bringing a strategy to life—and accelerating value creation—often requires new skills, expanded market access,
and stopping some things while starting others. Transactions are a key lever, but more than half of deals destroy
value. What does it take to unlock potential?

Strategic Planning Excellence

Staying ahead of—or leapfrogging—rivals demands a superior and always-on strategy function to envision the
future, and your organization’s place in it, over and over again.
Finance Function Excellence
Achieving superior business results requires a world-class finance function and an approach to financial
management that is aligned with strategy, digital, and adept at creating and sustaining a performance culture.

Risk Management
Understanding, preparing for, and mitigating the landscape of risks—both strategic and operational—are crucial
elements of strategy and protectors of value.

Corporate Strategy

What is corporate strategy? The art of ensuring that the value of the enterprise as a whole is more than the sum
of its parts.

The goal of corporate strategy is to articulate a vision of a great company that is also a great stock—and to
define the specific moves needed to bring that vision to life. Rooted in a clear understanding of competitive
advantage, corporate strategy lays out a multiyear roadmap for how best to leverage advantage to drive
profitable growth and strong, sustained value creation. A winning corporate strategy will identify the optimal
business portfolio, prioritize the right growth platforms, and set a financial strategy to transform vision into
value.

Our corporate strategy work with clients focuses on answering questions in four key areas:

1. Mission, vision, and ambition. Who are we? Where is our industry headed? And where do we want to be
five or ten years from now?
2. Corporate portfolio strategy. What is the overall logic of our business portfolio? And what are the roles and
strategic priorities (generate cash, expand and grow, divest) of the business units it comprises?
3. Corporate growth strategy. What are our growth engines? Do we need to pursue new growth vectors? What
are the key platforms that will realize our growth ambition?
4. Financial strategy. Do we have the right processes and policies to link strategy to value creation? Do we
efficiently allocate capital—and is the balance between reinvestment in the business and payouts to
investors optimal? Do we have the right investors and investor story?
Spotlight on Corporate Portfolio Strategy
Portfolio strategy—helping clients determine how to invest capital across businesses, products, and initiatives to
maximize returns—has been at the core of BCG’s DNA since our founding. And any good value creation
strategy depends on a clear portfolio strategy and active management of the business portfolio that focuses on
three imperatives:

 Define the value creation roles of the businesses in the portfolio. Which businesses will be your growth
engines? Which will mainly supply cash for other businesses to invest? Which will you need to turn
around or consider selling?
 Allocate capital differentially across the corporate portfolio. Capital allocation should depend on each
unit’s current performance, future potential, and role in the portfolio. Take the perspective of a long-
term investor: will this business be worth more in the future—and what can we do to maximize our
return on investment?
 Shape and reshape the business portfolio over time. M&A and divestitures are critical parts of active
portfolio management. How can we accelerate opportunity through acquisitions? Which businesses no
longer fit your portfolio logic and investor story and would be better owned by others?

Business Strategy

Defining a path to win in today’s game—and tomorrow’s

If corporate strategy is about determining the optimal allocation of capital across a portfolio of strategic business
units, the role of business strategy is to deploy that capital to drive growth, generate value, and create
sustainable competitive advantage—in other words, to put it to work in the business, in the most effective way
possible.

But determining the right business unit strategy is anything but straightforward, and the approach should be
constantly refreshed. A business only prospers if it can satisfy the changing needs of its customers both more
fully and more profitably than its competitors. Today, with digital disruption blurring industry boundaries and
geopolitics challenging long-held assumptions, those needs are changing faster than ever. Adding to the
complexity is the fact that different strategic environments call for different types of business strategies.
BCG helps clients chart winning business strategies by focusing on three critical deliverables.

Rich Insight into the Strategic Environment. How are the

priorities and options of leading-edge customers changing?
Where are today’s profit pools, and how are they likely to
evolve or be disrupted? How well are competitors, whether
traditional or emerging, positioned to respond? Which
combination of choices on where to play—by customers,
markets, and investments—has the greatest potential to create
value relative to rivals?

A Candid Assessment of the Business’s Real Competitive

Advantages. Is the business unit’s right to win based on such
factors as cost, capabilities, intellectual property, unique
access to data, and position in an ecosystem? Are key moves
required to acquire new assets or capabilities that are essential
to future advantage?

A Direct and Agile Connection Between Strategy and Execution. What’s the best way to create alignment
around the strategy? To set and communicate goals? To create tight market feedback loops that enable rapid
learning and adaptation while also ensuring programmatic rigor in execution?

Spotlight on Business Growth Strategy

Growth is imperative and possible—but perilous. It drives nearly three-quarters of shareholder returns over a
ten-year period, but fewer than half the companies that go for growth create value in the process.

In our study of breakout growers that created value, we found that they did two things right:
 Defining the right strategy—the vector or direction of travel
 Putting the right amount of thrust behind the strategy to ensure that it succeeds

Our experience shows that the best growth strategies are built on advantage but stretch the thinking to envision
ambitious moves across the core, near adjacencies, and toward new frontiers. And they deliver by concentrating
investment on essential capabilities, accelerating M&A to achieve critical mass, funding the journey through
productivity enhancement, running growth as a program, and bringing investors along.
Explore Featured Solutions and Resources

Value Creation Strategy and Shareholder Activism Defense

A sharp value creation strategy not only ensures that a great business is a great stock—but it also helps deter
activist attacks.

A linear approach to strategy—first defining a business strategy, then developing a supporting financial strategy,
and finally selling that package to investors—may seem logical, but it’s often not optimal.

The approach falls short because of the many interdependencies among business, financial, and investor
strategies. Only by developing all three iteratively and in parallel—exploring multiple scenarios—can an
organization maximize its total shareholder return (TSR).

In our value creation strategy work for clients, we:

  Assess the shareholder value creation potential of current corporate and business strategies. What is the
future cash flow from each of the corporation’s businesses likely to be—and how does it ladder up to
an estimate of the company’s future multiple and TSR? What strategic options exist to enhance
performance?
 Determine the optimal capital structure and best use for excess cash. When it comes to funding
investments, what is the right mix of free cash flow, equity, and debt? And since most financially
healthy companies generate cash well in excess of their reinvestment needs, how much of that cash
should remain on the balance sheet versus being returned to investors via dividends and buybacks?
Finally, how does the capital structure change under different strategic assumptions?
 Evaluate and optimize the match between the strategy and the investor base. Do investors see the
strategy as credible and consistent with their investment priorities? If not, what needs to change: the
strategy, the shareholders, or both?

Spotlight: Defending Against Shareholder Activism

Shareholder activism is on the rise. From 2005 through 2019, the number of activist attacks globally grew from
54 to 191—a rate of more than 9% per year. And it’s not just subpar performers that are targeted. Nearly one-
third of companies attacked from 2016 through October 2020 were delivering three-year total shareholder
returns above the S&P Global 1200 median as of the month prior to the attack—and more than half of those also
had a forward price-earnings ratio above the S&P Global 1200 median.

Defending against an activist attack is costly—and not just in dollar terms. Management time that could be spent
building medium-term advantage is diverted to the short-term crisis. Asking one question can help build
immunity to activists: how to create value that beats peers?
BCG is the only major consulting firm that has an explicit policy against working for shareholder activists. We
only support our corporate clients in preparing for and responding to activist demands. Using our proven
proprietary toolkit, we rapidly identify the ways to unlock value and the transformational moves that mitigate
activism risk.

M&A, Transactions, and PMI

Creating value from M&A, transactions, and post-merger integration depends on making the right strategic
decisions and proactively managing the business portfolio over time. More than half of all M&A transactions
and post-merger integrations end up destroying value. These deals are not only complex but also—for many
companies—infrequent. BCG offers the expertise and capabilities to help clients maximize the value of these
deals at each stage of a transaction.
Strategic Planning Excellence

The best strategic planning processes focus on insight, preparedness, and agility—not bureaucracy.

Most organizations are dissatisfied with the way they make strategy. They see their strategic-planning approach
as too rigid, bureaucratic, reactive, and disconnected from execution. Confronted with faster-changing
environments, they doubt their process can see around the bend to reveal the big, disruptive opportunities that
will drive long-term value creation. 

At the heart of these concerns is the misconception that strategic planning is just about annual budgets and five-
year plans. These traditional planning approaches work well in stable and relatively predictable sectors, but
stability is less and less the norm. More turbulent environments call for nimbler approaches that match the
clock-speed of planning to that of the market.

Four Strategic Planning Best Practices

1. EXPLORE STRATEGY AT MULTIPLE TIME HORIZONS

The long, medium, and short term need to be addressed individually. Each demands different goals,
stakeholders, and rhythms—and none should be ignored.

2. REINVENT AND STIMULATE THE STRATEGIC DIALOGUE REGULARLY

It’s easy for a strategic planning process to fall prey to the law of diminishing returns. With too much repetition,
the exercise can become stale. Leading practitioners inject inspiration and drive results by focusing on a
changing set of strategic questions—and by redesigning processes that no longer fit the pace of the strategic
environment.

3. ENGAGE THE BROAD ORGANIZATION AND BEYOND

Going outside the central strategy team to business leads, board members, agile teams, customers, and even
suppliers can help avoid groupthink, boost preparedness and responsiveness, and lead to better strategy
execution.

4. INVEST IN EXECUTION AND MONITORING

Clear communication is essential, but so is an action-oriented mindset supported by the right capital allocation,
organization, and metrics. Priority strategic initiatives need to be protected from the day-to-day and tracked on a
shared performance dashboard.
Spotlight: Strategic Planning in an Agile Environment
Organizations are embracing agile ways of working, which accelerate results by giving teams significant
autonomy. But autonomy without alignment can lead to chaos. If strategy alignment is hard in traditional
settings, rapid strategic planning and continuous strategy re-alignment in fast-changing markets is even harder.
BCG’s Scan, Orient, Decide, Act approach can help ensure teams are rowing in the same direction and provide
critical feedback on weak signals that may suggest the strategy needs to be rethought.

Finance Function Excellence

Finance functions have to take on a demanding new role and become strategic partners in order to help
organizations stay ahead of the competition and fulfill their missions. BCG works with chief financial officers
(CFOs) and their teams to reach finance function excellence.

Macroeconomic instability, radically new business models, and fast-changing consumer demand are just some
of the forces reshaping the corporate landscape. The role of the finance function can no longer focus solely on
forecasting and preparing financial reports and analyses. It must broaden its reach to extract valuable data
insights that can inform business decisions and then collaborate with leaders throughout the organization to
translate those insights into action.

To become a best-in-class finance function, helping companies become more agile and better equipped to thrive
in a volatile environment, CFOs and their teams must:

 Forge a strong link between the organization’s overarching strategy and the finance function’s
performance mandate.
 Activate the capabilities required for both traditional and new business models.
 Evaluate every investment through a strategic lens.
 Extract maximum business value from digital technologies and tools.
 Maintain a clear line of sight into capital markets and communicate a compelling message about the
organization’s value creation and strategic plans.
 Build a strong performance culture, empowering people to proactively pursue the changes necessary to
evolve and improve.

BCG’s Finance Function Consulting Services

The new imperatives for the finance function require a tricky balance. CFOs must drive transformation within
the finance organization, developing new structures, mindsets, and ways of working. But they will continue to
feel pressure to meet the short-term goals of producing quarterly reports, attending weekly budget meetings, and
staying on top of shifts in regulations—all of which take time away from the task of achieving broader financial
excellence.

The Center for CFO Excellence

BCG’s Center for CFO
Excellence helps CFOs and
their teams manage this balance
and reach finance function
excellence. Our comprehensive
approach draws from both our
experience working with
finance organizations across a
diverse array of industries and
our in-depth discussions with
finance leaders around the
world.

We help CFOs transform their

finance function operating
models to achieve higher efficiency and effectiveness, unleash the power of advanced analytics and artificial
intelligence, orchestrate companywide transformations to drive the corporate value agenda, and more.
CFO Excellence Index
BCG uses many proprietary tools in partnerships with CFOs and their teams, including the CFO Excellence
Index—a database of several hundred finance functions, representing a broad set of industries globally. It
analyzes all the key CFO responsibilities, as well as digital maturity, from the perspectives of efficiency and
effectiveness and indicates best practices across industries and companies. Below is an example of the CFO
Excellence Index in practice:

Risk Management

Identifying and managing risk—financial, nonfinancial, strategic, or operational risk—requires more than just
selecting the right tools. At BCG, we view risk management as an organizational mindset that helps companies
confront uncertainty, increase transparency, and embed adaptability and resilience in their teams, processes, and
systems.

Preparing for risks is a data-driven exercise, but too often critically important external and internal data is buried
or otherwise unavailable to the risk management function. BCG helps clients create an organized, cross-
functional flow of information and data, enhanced by AI and analytics.

With this flow in place, conversations about risk-reward balance become part of day-to-day business operations,
creating an adaptive risk organization that is well versed in strategic risk management and ready to respond to
challenges—even to potentially devastating events, like the COVID-19 pandemic. Integrating risk assessment
and scenario-based stress testing into the regular operating rhythm creates an ever-improving system instead of a
one-off solution. Our risk management consultant teams are experienced with various risk types and the critical
enablers that make up effective systems as well as with global and local regulations for risk management.

Business Model Innovation Delivers Competitive Advantage

Product and service innovation are essential, but business model innovation can deliver more lasting competitive
advantage, particularly in disruptive times.

In the past 50 years, the average business model lifespan has fallen from about 15 years to less than five. As a
result, business model innovation is now an essential capability for organizations seeking to drive breakout
growth, reinvigorate a lagging core, or defend against industry disruption or decline.

What Is Business Model Innovation?

Business model innovation is the art of enhancing advantage and value creation by making simultaneous—and
mutually supportive—changes both to an organization’s value proposition to customers and to its underlying
operating model. At the value proposition level, these changes can address the choice of target segment, product
or service offering, and revenue model.

At the operating model level, the focus is on how to drive profitability, competitive advantage, and value
creation through these decisions on how to deliver the value proposition:
 Where to play along the value chain
 What cost model is needed to ensure attractive returns
 What organizational structure and capabilities are essential to success

Business model innovation is also critical to business transformation. Many organizations share a common set
of concerns: What type of business model innovation will help us achieve breakout performance? How do we
avoid jeopardizing the core business? How do we build the capability to develop, rapidly test, and scale new
models? Inspiring an organization to change is not a trivial undertaking, but given the current strategic
environment, it’s a critical one.

Four Approaches to Business Model Innovation

Companies hoping to drive growth through business model innovation face a number of critical questions: How
broad should the scope of the effort be? What’s the appropriate level of risk to take? Is it a onetime exercise, or
does it call for an ongoing capability?

To answer those questions, it’s important to realize that not all business model innovation efforts are alike.
Understanding the four distinct approaches to business model innovation can help executives make effective
choices in designing the path to growth:
1. The reinventor approach is deployed in light of a fundamental industry challenge, such as
commoditization or new regulation, in which a business model is deteriorating slowly and growth
prospects are uncertain. In this situation, the company must reinvent its customer-value proposition and
realign its operations to profitably deliver on the new superior offering.
2. The adapter approach is used when the current core business, even if reinvented, is unlikely to combat
fundamental disruption. Adapters explore adjacent businesses or markets, in some cases exiting their
core business entirely. Adapters must build an innovation engine to persistently drive experimentation
to find a successful “new core” space with the right business model.
3. The maverick approach deploys business model innovation to scale up a potentially more successful
core business. Mavericks—which can be either start-ups or insurgent established companies—employ
their core advantage to revolutionize their industry and set new standards. This requires an ability to
continually evolve the competitive edge or advantage of the business to drive growth.
4. The adventurer approach aggressively expands the footprint of a business by exploring or venturing
into new or adjacent territories. This approach requires an understanding of the company’s competitive
advantage and placing careful bets on novel applications of that advantage in order to succeed in new
markets.