By: Ben Garden, Managing Director, Iris Pricing Solutions

Our current market has resulted in private equity firms operating in a fundamentally different environment. High interest rates, compressed exit timelines, and heightened scrutiny from Limited Partners (LPs), have redefined what it takes to deliver consistent value creation. Traditional levers such as cost-cutting, procurement optimization, and headcount reduction, have largely been exhausted. The challenge now is identifying where additional value can come from and how quickly it can be captured.

It’s no surprise, then, that:

60% of PE deals fail to meet return expectations due to unidentified operational issues.

In many cases, it isn’t market conditions holding performance back. It’s the value that gets missed in diligence. Among those missed opportunities, pricing stands out both in frequency and in financial impact. While often treated as a post-close priority, pricing is one of the clearest indicators of a company’s commercial maturity and one of the most reliable levers for near-term EBITDA expansion. For private equity firms aiming to sharpen bid precision, reduce risk, and accelerate time-to-value, pricing deserves a place at the center of the diligence conversation.

Where Traditional Diligence Misses the Mark

Conventional commercial diligence typically focuses on high-level metrics: market growth, customer retention, and competitive position. These are essential inputs. But they don’t explain how a company actually monetizes value or why that monetization may be falling short.

Time and again, we’ve seen pricing realities challenge core deal assumptions. In our work with private equity firms, we’ve uncovered cases where:

  • A target claimed “premium pricing” power, but showed over 40% price dispersion across similar customers, with no link to value delivered

  • Margin erosion, attributed to market pressure, was in fact the result of $2 million in unmanaged freight and rebate leakage

  • Growth projections assumed pricing scalability, despite a lack of price governance, segmentation, or methodology

These aren’t insights that surface in management meetings or investor decks. They live in the transactional details, and once uncovered, they can fundamentally reshape both valuation logic and post-close priorities.

Pricing as a Value Creation Lever

For many investors, pricing has moved from an operational detail to one of the most reliable drivers of margin expansion. When embedded into the diligence process, pricing insights can unlock three major advantages:

  • Greater bid discipline
    Understand true margin performance, not just what’s presented, and avoid overpaying based on assumed strength.

  • Stronger thesis validation
    Align margin improvement projections with tangible pricing actions that can be executed confidently post-close.

  • Post-close momentum
    Move quickly, with initiatives that are scoped, prioritized, and informed by data before the deal even closes.

Collectively, these pricing insights do more than sharpen the investment lens; they accelerate time-to-value.

A Structured Lens on Pricing Health

At Iris Pricing Solutions, we work alongside private equity firms to bring analytical depth and commercial clarity to pricing diligence. Our focused 4–6 week process includes:

  • A pricing health assessment, covering net margin, discounting practices, and cost-to-serve

  • A valuation of pricing upside, often identifying 300–500 basis points in achievable margin lift

  • Scenario modeling that ties pricing strategy to the investment thesis, incorporating segmentation, enforcement, and commercial capabilities

  • A Day 1 roadmap, designed to integrate directly into 100-day plans and reduce execution ramp-up

Because we engage early, we develop the institutional knowledge needed to accelerate post-close implementation and reduce handoff risk.

Pricing improvements are typically twice as effective as cost reductions in driving EBITDA gains and are often easier to implement.

The Next Step in Smarter Value Creation

Execution risk has never carried more weight than it does in today’s deal environment. Pricing remains one of the few levers that can meaningfully improve both bid accuracy and post-close performance, with minimal disruption and fast returns. For private equity firms looking to move faster, reduce margin surprises, and realize more from the businesses they back, pricing due diligence isn’t optional. It’s a competitive advantage.

If you’d like to explore how pricing diligence could support your upcoming deals, get in touch. Our team would be happy to share examples, benchmarks, and next steps.