Situation
A private equity group spun off a non-core subsidiary of one of its holdings. The subsidiary is a U.S. manufacturer, marketer, and distributor of outdoor recreational products. Shortly after the spinoff, the private equity group acquired a complementary Canada-based company and combined the two entities. The intent was to grow market share and lower operating costs as a combined group. During this fast-paced activity, the private equity group and the CEO of the combined entities determined that more experienced senior management was needed to achieve desired objectives.
Solution
A E78 partner stepped in as interim CFO and produced the following:
- Developed the business plan for the combined business and presented it to the Board of Directors. KPIs were established for each entity to monitor progress toward objectives.
- Established integration synergy milestones and measurable objectives with weekly status to the CEO, Board, and owners
- Implemented financial reporting processes and structure for the combined companies which the private equity group considered to be ‘best-in-class’ for its portfolio companies
- Implemented a structured cash flow forecasting regimen
- Established make vs. buy analysis and decision-making processes
- Initiated a transfer pricing study
- Initiated ISO 9001 assessment
- Facilitated the transfer to a new bank finance structure
- Facilitated an efficient and orderly transfer of information/processes to the permanent CFO
Results
- The Board approved the combined business plan and management incentive program
- The financial reporting processes and initiatives initiated by the E78 interim CFO to enable success as a combined group of companies were continued without exception by the permanent CFO
