The analytics gap and private equity
Given the strong growth of the private equity market, and the increasingly competitive,
fast-paced nature of target selection and evaluation, the analytics gap described above has three potential consequences for acquisitive private equity firms.
Inflated valuations
Overstated analytics capabilities might result in elevated valuations due to challenges in achieving plans related to analytics, particularly for analytics-driven product companies
Required investments
Private equity firms facing an analytics gap likely will need to make additional investments to establish the target’s stated capabilities
Extended timelines to expected ROI
The time needed to remediate issues and make investments might extend the initially expected timeline to value creation
