Industrials and Business Services Value Creation Study 2025
Captures the perspectives of over 100 private equity executives across both deal and operating teams in EMEA and North America.
With balanced input from deal teams and operating partners, the study reflects the full investment lifecycle in the industrials and business services sector: from underwriting and diligence to post-acquisition transformation and exit.
Successful value creation in industrials doesn’t hinge on one initiative. Our study shows how leaders orchestrate commercial, operational, digital, and organizational levers into a cohesive roadmap. The insights highlight not only what has worked in the past, but more importantly, where value creation is heading next.
Study findings at a glance
Our 2025 study shows private equity in industrials shifting to an operational-first, execution-driven playbook, with pricing delivering the fastest wins and digital emerging as the next critical lever.
A combination of macroeconomic slowdown, policy unpredictability, and geopolitical volatility make it hard to rely on traditional growth-only stories. Deal teams and operating partners consider economic downturn (46%), tariffs (41%), and geopolitical risks (41%) to be the top three challenges in 2025.
33% of deal teams and operating partners allocate importance to operational improvements in driving the equity story, almost double the next lever (Buy & Build at 20%) and far ahead of things like consolidation, disruption, or financial engineering. A clear signal that the industry has shifted. Pricing, sales, and efficiency should be assessed during diligence and prioritized from day one.
Pricing wins today and tomorrow. It’s considered the both the fastest to impact (7.8 months) and the least likely to fail (4%). But the real differentiator is execution: embedding pricing discipline from diligence to exit, through KPIs, organizational design, and enablement.
Our study reveals that 2/3 of failures stem from controllable factors like poor implementation, unrealistic business cases, or PortCo resistance. Change management, tools, and resourcing are financial enablers, not “soft” workstreams.
GenAI is leveraged across use cases in about a third of cases today, and AI adoption is expected to grow significantly across all applications. Leading firms are moving beyond the buzz and focusing on high-impact, scalable GenAI use cases in data, ops, and product. At the same time, systems and infrastructure are rising in importance. Companies recognize AI success isn’t about a silver bullet, but about building the right foundation of clean data, integrated systems, and governance to make digital transformation sustainable.
Uncertainty has forced PE to move from long-term planning to constant adaptation. Value creation has become iterative, not linear. The share sticking to an annual review drops sharply (from 53% to 42%) as the industry shifts toward much more frequent, agile refresh cycles. This is the essence of Simon-Kucher’s VCP 2.0 framework: a more dynamic, data-driven approach where initiatives are monitored quarterly, benchmarked across the portfolio, and actively reallocated to maximize impact.
Private equity: The operational era of value creation accelerates
When it comes to value creation in industrials and business services, the old reliance on multiple expansion and financial engineering is giving way to something more tangible: operational excellence. While operations have always been part of the PE playbook, they have now become the primary engine of value, outpacing every other lever. This deep-dive discusses a decisive shift in how investors drive returns.
Pricing’s impact is faster, cleaner, and more reliable
Pricing is unique among value creation levers. Unlike a full operational turnaround, it goes straight to the bottom line, materializes quickly, and carries lower execution risk. In many ways, it’s the cleanest lever in the private equity toolkit. Our 2025 Industrial and Business Services Value Creation Study confirms this reality. This article discusses why pricing forms the backbone of today’s equity stories in industrials, standing out as the lever that consistently delivers speed, certainty, and bankable impact.
Digital driving the next wave of value creation in industrials
Just twelve months ago, value creation conversations were dominated by “what’s our GenAI angle?” Pilots were everywhere, but most amounted to hype, hope, and experimentation. This year, the mood has shifted: digital has matured into a lever firms now feel real pressure to deliver impact on. This article examines the clear turning point in how investors view digital.
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