International Manufacturing Companies Combine to Rapidly Grow Market Share

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

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