Advisor: Dorian Alexandrescu
Industry: Energy and electrical equipment
Areas of Expertise: Business strategy development, organizational development and effectiveness and M&A preparation, due-diligence, execution and integrations, with focus on conventional and alternative energy/electrical equipment for transmission, distribution and control applications in the US and emerging markets
We recently had a chance to catch up with energy industry expert Dorian Alexandrescu. Dorian is based out of Vermont, is fluent in four languages and conversational in several more. Below is a recap of our conversation, with responses edited for clarity.
InquireOf: What should a private equity investor know about your industry today?
Dorian: There is a lot of activity in the electrical equipment segment. If a private equity fund comes to a potential deal without deep expertise they're likely to repeat mistakes. Valuations are going through the roof.
InquireOf: What shifts have you seen over the last five years in your industry?
Dorian: Overall, there has been a lot of consolidation with the significant infusion of private equity money in the middle market. At the global players’ level there's been consolidation where effectively all large players have acquired upstream or downstream within their supply chain or lateral. These are shifts that can be seen on a macro level.
Additionally, Internet of Things is a big topic, but these trends are developing and there isn't a clear idea of how it will work. Everyone is looking for ways to integrate hardware and software in devices where it was previously unimagined. Whether or not this idea will bring value remains to be seen, but at the moment everyone seems to be on this path.
InquireOf: What trends should people look to see in the next 18-24 months?
Dorian: The real question is at what point in time will there be a clearing of the deck due to an economic slowdown? A high tide lifts all boats so everyone is doing quite well now, but we're starting to see signs of a slow down. The political implication of what happens in the next 12-18 months will eventually work its way into the markets. As purchasing power drops some of the weaker players whose performance weaknesses are masked by a strong market will run into financial troubles.
In the lower and mid market, economics are going to prevent these companies from moving to the next level. Of course, longer term, this will create opportunities for those who are still standing.
Why Connect with Dorian?
Dorian’s strengths as an expert advisor lie in his ability to help private equity investors identify whether opportunities that come up for sale are worth investing in, often through an education process about market dynamics.
Overall, the energy field is an interesting and solid investment opportunity. Dorian sees his role as helping clients gauge what the payback will be, playing devil's advocate, and challenging assumptions. For example, if it's a small company, does it have the leadership in place to navigate the acquisition? Once the business has been acquired, what's the exit strategy look like? An expert advisor like Dorian can help a private equity fund understand if there is a strategic buyer and what they look like. Dorian recommends that all of these discussions should be had on the front end.
Fun fact: Dorian spent a month in the Himalayas in April/May this year and went up to Everest base camp. Impressively, he made it up to over 19,000 ft!
If you’d like to connect with Dorian or similarly experienced industry experts, you can learn more here.
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