Case study: Achieving Liftoff

Igniting Growth to Achieve Higher Valuation in Exit

A boutique Human Capital Management vendor was struggling to increase organic growth. Working with Morgan Hill operators, the company was able to achieve desired growth objectives, leading to a successful exit at a higher than expected valuation.
Key takeaways:

  • Drove 100% year-over-year revenue and profitability increase
  • New methodologies for sales, pre-sale, solutions and delivery resulted in a 25% in gross margins
  • Led aspects of successful sale to a private buyer

The Challenge:

While the company had an established presence as a leading vendor in the HCM market, they were experiencing a growth roadblock. Revenue performance was lagging, while company leadership struggled to innovate IT infrastructure at a time when competitors had already made the transition to the cloud. Growing revenue and shedding unnecessary costs were the crucial final steps of an exit strategy, and these were the core objectives guiding Morgan Hill operators.

The Solution:

In order to hit performance targets, the HCM vendor had to find unique ways to evolve their model and capture more revenue. This meant looking squarely at the root cause of operational inefficiencies. For this company, roadblocks to growth were rooted in poorly aligned messaging, and underutilization of cloud infrastructure to help cut costs and improve efficiency.

Having identified the roadblocks, Morgan Hill operators deployed mission-critical solutions in the following areas:

  • Fresh brand and strategy roadmap. A thorough analysis of the market indicated the company was not aligned to maximize growth. A brand and messaging overhaul facilitated new revenue opportunities and partnerships, which improved profit margins and increased the top line.
  • Strategic cloud infrastructure expansion. A number of substantial new cloud infrastructure partnerships were initiated, which cut costs and expanded IT capacity, allowing the company to expand into lucrative product-driven business initiatives.

Commenting on the transformation, the company CEO had this to say: "We were able to sell the business for a much higher multiple by driving immediate growth in the 12 months leading up to the sale."

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The Outcomes:
    • Drove 100% year-over-year revenue and profitability increase
    • Developed new businesses initiatives to improve company valuation
    • New methodologies for sales, pre-sale, solutions and delivery resulted in a 25% in gross margins
    • Led successful sale to a private buyer

    The effectiveness of these initiatives was quickly evident. Impressive revenue growth, powered by improved organizational design, produced the outcomes needed to take the final step in the company's exit strategy.

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    MHP was founded on the principle that deep industry knowledge, pragmatic operating expertise, and a unique playbook produce superior results. We create strategies and deliver operational support, aligning with stakeholders to achieve objectives. Honed at hundreds of technology companies, our innovative, capital efficient Operators as a Service model is battle-tested and, quite simply, works.

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