Why Brand Might Be the Most Underrated Lever in Private Equity
There’s a quiet truth in private equity that’s rarely voiced aloud: value isn’t always visible on a spreadsheet.
Not at first glance, anyway. Yet time and again, we’ve seen it: the intangibles drive the premium. And few intangibles are more underestimated, or more commercially potent, than brand.
You won’t find it in the CIM. It doesn’t sit neatly in the model. But when a company trades at 5× EBITDA instead of 3×, brand almost certainly played a role. Even if no one calls it that.
So what does ‘brand’ mean in this context?
It’s not logos or colour palettes. For PE firms, brand is far more commercially visceral. It’s pricing power - when customers pay more because they trust you. It’s margin resilience - when competitors chase volume and you don’t have to. It’s employee retention - when your story resonates louder than someone else’s salary offer. And above all, it’s the narrative that helps buyers believe in upside before they’ve even looked at the numbers.
The most forward-looking investors are learning that brand isn’t “lipstick” as more than one transactor has called it. It’s capital. Cultural capital. Strategic capital. Exit capital. Yet it remains underutilised. In South Africa, and across many emerging markets, brand is still filed under “soft stuff.” It’s anything but.
Hostess: Resurrected by Storytelling
Hostess Brands filed for bankruptcy in 2012. Most assumed the Twinkie would be buried alongside other forgotten icons of American consumer culture.
Then Apollo Global Management and Dean Metropoulos stepped in, acquiring the brand for $410 million. Not to overhaul the product. But to resurrect the story.
Their campaign, “The Sweetest Comeback in the History of Ever”, was a masterstroke of emotional marketing. Nostalgia became capital. Consumers weren’t buying sponge cake. They were buying memories. Demand surged, margins followed, and within three years, Hostess went public again at a $2.3 billion valuation, more than 5× the initial investment (CNN).
It was one of the decade’s most compelling brand-led turnarounds. The market didn’t just buy the product - it bought the narrative.
Blue Yonder: Selling the Future, Not the Past
On the other end of the spectrum sits Blue Yonder, formerly JDA Software, a B2B supply chain platform with decades of history but a dated brand.
Under New Mountain Capital and later Blackstone, JDA didn’t just update its offering. It reframed its identity. After acquiring a small German AI company named Blue Yonder, the firm adopted the name and repositioned itself as an AI-native, future-focused platform.
The transformation wasn’t just cosmetic. It created narrative clarity, positioning Blue Yonder not as a legacy ERP provider, but as the tech platform of tomorrow. Panasonic agreed, acquiring the company in 2021 for $7.1 billion (for 80% equity). A stark leap from the $1.9 billion price tag just a few years prior (TechTarget).
The difference? A brand buyers could believe in.
And in South Africa?
We’re late to this conversation. In many mid-market transactions, brand is still viewed as aesthetic, optional, external. But it’s anything but. Particularly when exits are harder, due diligence is limited, and international acquirers demand clarity fast.
A credible brand builds confidence when the financials raise questions. It can bridge valuation gaps when local benchmarks lag global multiples. It’s especially critical in high-competition sectors - like tech, FMCG, and agri-inputs - where products are interchangeable, but perceptions are not.
So Why Don’t More Firms Invest in It?
Because brand work doesn’t conform to quarterly timetables. It won’t always show up in Q3. But over a five-year hold, the difference is compounding.
The firms that build brand equity early don’t just sell businesses. They sell belief in future value. And belief, as any seasoned transactor knows, is what gets deals over the line. Handled with the same precision as capital structuring or operational upgrades, brand becomes a multiplier. It attracts talent. It commands price. It tells the story a buyer wants to inherit.
So next time you're evaluating a portfolio company, ask not just what it does but what it means. That’s where the value hides. Sometimes, that’s where the multiple grows.