Pricing: The underused enterprise value lever
Why pricing remains underused in private equity, and what disciplined, value-led execution looks like in practice.
In private equity, the objective is simple: grow enterprise value. Pricing is one of the few levers that can move enterprise value through two routes at once. It can lift EBITDA and it can influence how buyers assess the quality and durability of that EBITDA. Most people accept the first part. Fewer take the second seriously, and that’s where value often gets left on the table.
In this article, Patric Kirchner explores how value-led pricing can strengthen both earnings and the exit story, and why it’s still too often treated as a later-phase initiative.
Why pricing matters more now
Entry multiples have been high enough for long enough that you cannot rely on scale alone to do the heavy lifting. In that environment, investors need a clear path to value creation that’s within their control, not dependent on market timing.
Pricing fits that bill more often than it gets credit for. It is often the fastest route to EBITDA uplift, yet it’s routinely deprioritized behind top-line growth, adjacencies and geographic expansion. Those moves can be right, but they tend to take longer and carry more execution risk. Pricing, done well, can move earlier.
So why is pricing still underused? Mostly fear and dynamics. It can be seen as a high-risk move that will provoke churn, and management teams often imagine a painful conversation with key customers.
Poorly executed, that risk is real. But value-led pricing is rarely a one-size-fits-all increase. The shift is from “can we push price?” to “where are we under-monetizing the value we already deliver?”
When the value case is clear, pricing tends to hold up better through negotiation and competitive pressure. The rest of this article outlines what good looks like, and how to make it manageable for management teams.
The EBITDA route: fix realization before raising price
The biggest misconception is that pricing equals a list price increase. In many portfolio companies, the faster upside is in realized price, not list price.
Discount drift, inconsistent deal-making, weak renewal mechanics, poorly defined tiers, and “special cases” that become permanent all quietly dilute earnings. Over time, that leakage becomes normalized. Teams stop seeing it as lost value and start seeing it as how business is done.
Value-led pricing starts in a different place. It asks where the business is already delivering value that customers recognize, then aligns price to that value in a way the front-line can defend.
That often means a set of moves that are specific and practical:
- tightening guardrails so discounting is a deliberate trade, not a reflex
- clarifying packages so customers can see why one option costs more than another and provide clear upsell paths
- improving renewal and escalation mechanics so value capture is not renegotiated from scratch every year
- focusing changes where sensitivity is lowest and differentiation is strongest, rather than pushing everywhere
This is also why a clear, managed view of the data matters. It’s hard to be targeted if you cannot see where price is holding, where it’s leaking, and why. The objective is not simply higher prices, but better realization with controlled risk and less volatility as you scale.
The multiple route: pricing shapes the exit story
Not only does pricing move enterprise value through EBITDA, it also affects how those earnings are judged at exit. Buyers pay for earnings they believe are sustainable, which is why the “how” matters as much as the “how much”.
Strong pricing work does the opposite. When pricing is treated as an embedded discipline, it becomes part of the equity story. It signals commercial control: clarity on what’s being sold, who values it, and where price can hold. That typically means fewer surprises, because earnings are less exposed to last-minute discounting, messy renewals, or churn that only shows up once it’s too late.
A one-off price move rarely shifts the multiple on its own. What matters is evidence that pricing can be run again in a disciplined way, without eroding demand.
Start with data
Pricing becomes far easier when it’s treated as a decision, not a debate.
By breaking performance into price, volume and mix effect, you can look for the patterns that matter: where discounting is concentrated, where renewals routinely fail to land uplifts, where price realization varies wildly by segment or geography, where customers accept higher pricing with little noise, and where they push back hard. Additionally, it allows you to implement your growth strategy whether it's driven by price increases or higher volume.
This also helps with the shareholder-management dynamic. It moves the conversation away from “we should put prices up” towards “we have clear leakage in specific places, and we can address it without taking unnecessary risk”. That is what makes targeted moves possible, rather than across-the-board action.
The takeaway
Pricing is often the fastest route to EBITDA uplift, and it can strengthen the multiple when it is value-led, targeted, and repeatable. But it stays underused because it is misunderstood: leaders imagine a difficult customer conversation and a high-risk move.
The better framing is value capture. Identify where the business is delivering value it is not pricing for, use data to target the lowest-regret opportunities first, and put in place the rules and cadence that make pricing stick. Done early, it improves performance and makes that performance more credible at exit. By simultaneously supporting both the EBITDA and multiple routes, the "compounding effect" of pricing excellence comes into play.
