CrutchCap | Case Study

Company

PDS, a portfolio company of a middle market private equity firm, provides comprehensive training and AI driven, voice activated products to the automotive industry at the OEM and dealer level.

Situation

After the exit of the company founder, PDS was experiencing performance issues due to the leadership transition, deteriorating relationships with customers and a misunderstanding of pricing/profitability of it's product offerings.

CrutchCap Actions

Elliott Crutchfield joined the board as Chairman and, in conjunction with the controlling shareholder:

Hired a new CEO and other executives

Repositioned the existing management into more productive roles

Repaired the relationship with the largest customer

Improved the pricing structure and profitability of the company’s largest contract

Negotiated a successful exit

Results

The realigned team significantly increased revenue and profitability. The company received several unsolicited acquisition offers leading to the sale of company to a strategic buyer. The PE controlling shareholder realized an IRR of 81.9% and a MOIC of 4.31x on its equity, while the value of the founder’s roll-over equity also increased significantly.