Cost, Pricing, and Operational Improvement after closing?

April 09, 2025

by a searcher from IMD in London, UK

I'm coming from a corporate (P&L owner) background in services and manufacturing. Gradually learning about the search fund space and considering to build an AI tool to support searching and improvement activities in my target(s).

I'm wondering how acquirers are actioning cost improvement, pricing, and general operational efficiency improvements (via processes like Time Driven Activity Based Costing). Is this top of mind after closing the deal? Where does this rank in the post-acquizition priority list?

Generally, how is this sort of improvement done today? (ERP plugins, excel, something more clever?)

Reply by a searcher
from Concordia University in Toronto, ON, Canada

If the business is already profitable having efficient cost structure, such improvements may go down in your priority list, but say in a turnaround case this is on top of the list.
One problem with many small (/manufacturing) businesses is lack of data. You will need to create systems (ERP/MRP....) to capture accurate data first for TDABC or ABC analysis or else, but that is expensive and time consuming of course. Meantime you can average out some expenses such as utility or direct labor per product to analyze cost structure / develop your pricing strategy, then excel together with your accounting system is the best.

Reply by a professional
from Olivet College in Chicago, IL, USA

Hi Eric, we often get engaged by buyers about 90 days after closing to do a full evaluation. Some of the more forward thinking individuals I have worked with will include us in the due diligence to get a better understanding of what they might change after closing and if there is fat they can get rid of.

+4 more replies.

Join the discussion