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.
An 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. KPI’s were established for each entity to monitor progress toward objections.
- 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 process
- 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
- 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.