An operating partner should have each manufacturing company in the portfolio log every AI saving the way a buyer's quality of earnings review tests a seller's adjustments, with the cost line it lowered, the month it first reached reported results, the documents that prove it and what it cost to get.
PwC, whose deals practice sells due diligence and valuation work, dated its midyear outlook for US industrial manufacturing deals June 17, 2026, stating this as its own view and citing no survey: Buyers now require evidence of productivity gains in the income statement, including throughput improvements, labor cost offsets, and predictive maintenance savings, before paying premium valuations.
A buyer's quality of earnings review, or QoE, is a study of a target's earnings by independent professionals it hires. Baker Tilly, an accounting firm that sells QoE studies, wrote in March 2022 that for a seller's adjustments, usually non-recurring expenses and perhaps excess compensation, a buyer's study should include validation of these claims including obtaining original documentation. Its next line reads Estimates should not be accepted and the rationale for each adjustment should be challenged. PKF O'Connor Davies, which also sells QoE work, published a guide for sellers on September 18, 2025. It describes pro forma adjustments, including restructuring savings, made to recent results as if events expected to occur in the future have already taken place, and says buyers expect strong supporting evidence for the more complex ones along with a demonstrated history of successful execution of similar cost reduction or operational improvement initiatives. Neither piece mentions manufacturers or AI.
A manufacturer's production savings reach the income statement by a longer path. PwC's US inventory guide, in a section dated May 31, 2024, says inventory cost includes, for work-in-process and finished goods, the costs incurred directly or indirectly in production, which includes labor and overhead, with the objective to match the specific costs of an item sold to its related revenues. On our reading, lower production labor or maintenance cost is carried in inventory first and reaches cost of goods sold as those units sell, so the log dates each saving by the month it reached reported results.
One entry might read: cost line, maintenance labor and parts in production overhead; first month in reported results, the month cost of goods sold carried the lower overhead; documents, work orders and maintenance invoices for matching periods before and after the predictive maintenance software went live; cost to get it, the subscription, sensors and installation.
In month one each company's plant controller lists every AI tool running and the cost line each is meant to lower. During month two the CFO fills in the month, documents and cost for each entry. At the month three quarterly review, the operating partner drops any entry without documents from the savings the value creation plan counts. Every manufacturer in a portfolio can keep these four columns.
An entry with documents and no month yet stays in the value creation plan as a forecast.
S&P Global Ratings, which may be paid for its ratings, normally by issuers, underwriters or obligors, published its eighth annual study of EBITDA addbacks on February 25, 2026, comparing management projections with reported EBITDA across 280 speculative-grade deals it rated, originated 2015 to 2022. It often gives some credit to addbacks it views as achievable, placed in the periods it expects the benefits, net of associated costs, rather than baking these factors into pro forma metrics as is the convention with marketing EBITDA. It analysed addbacks in aggregate, since companies rarely disclose the actual achievement of specific cost savings.
