A Shift in Private Equity Deal Value Creation Contributing Factors

Revenue growth is doing more of the work in enterprise value than GPs realize.

Recent industry analysis shows a shift in how value is created in private equity deals: revenue growth is now the largest contributor to total enterprise value, with EBITDA expansion and multiple expansion playing important but supporting roles. To be clear, we are NOT saying that margin is irrelevant. We’re simply saying the data indicates it’s not the end all be all.

According to The Private Equity Value Creation Report: 2025, revenue growth accounted for 54% of total value creation, while margin/EBITDA-linked improvement and multiple expansion contributed the remaining 46%. This reflects how buyers now underwrite valuations: growth first, earnings second — with compound impact on exit multiples when EBITDA improves on a stronger top line.

For GPs, the implication is strategic: Championing revenue growth and disciplined EBITDA enhancement isn’t optional — it’s what distinguishes outperformance in underwriting, portfolio playbooks, and exit execution.

It also emphasizes that the partners that are most helpful to PE firms are the ones who can authoritatively suggest not only what strategies need to be implemented at portcos, but who can show HOW to implement them as well.

We at NorthShift particularly relish in such reports, because they corroborate our focus on helping GPs turn revenue + EBITDA hypotheses into predictable strategic action plans that hold up at IC and resonate with buyers — so value isn’t just created, it’s captured.

Wishing you a happy holiday!

Get in touch with us to learn more

Chart source: The Private Equity Value Creation Report, 2025 (Gain.pro)