Client Situation
A rapidly growing homeowner services company had a vision to become the dominant one-stop platform for a broad range of homeowner services. The company was achieving this vision primarily through acquisitions and partnerships, along with investments in technology, but needed more capital to continue on its successful path. A Special Purpose Acquisition Company (SPAC) had provided a vehicle to access this capital through an accelerated path to public company status and currency, but the company would have many challenges to quickly ready itself to both become public and operate that way by the agreed merger deadline, less than six months away.
As with many such SPAC mergers, there was the challenge to implement SEC-level controls and reporting, to step up to the audit standard for public companies, as well as to file additional disclosures and other filings. This situation was complicated even more by 17 corporate acquisitions that were in various stages of integration with different IT systems as well as HR practices and processes. In addition, there were general technology issues such as the changeover to a new ERP platform. A new CFO had been hired primarily to take on these challenges and take the company public within six months.
Solution
The CFO quickly realized he needed outside help to achieve the merger by the deadline. He brought in as project manager an experienced E78 CFO resource who had been in situations like those facing the company, and who had managed multidisciplinary teams to achieve specific results. While her initial engagement was to make the finance processes ready for public company status, it quickly became apparent to her and the CFO that a larger team with broader operational expertise would be required, particularly in IT, but also in HR and accounting. After an assessment phase, the CFO changed the engagement to add team members to assist with technology solutions and fill interim roles. In addition to hands-on work, the E78 project manager was to direct the highly focused team to achieve the required results.
From the diagnostic she had already performed, the E78 project manager was able to lay out workstreams and timelines to achieve public company status by the deadline and continue to bring processes to desired levels in the early subsequent months. She added to her team an experienced E78 controller and an HR specialist in payroll and benefits to accomplish some of the integration and readiness workstreams.
In a matter of months, the team raised control processes to SEC standards, shortened the closing process, completed changeover to a new ERP system, and managed completion of the year-end audit under public-company requirements, among many other accomplishments.
Throughout the engagement, the E78 project manager reported to a company steering committee on a weekly basis, showing the status of the coordinated projects to achieve the merger by the deadline and operate as a public company going forward. This helped iron out issues, stay on schedule, and maintain focus.
Results
The company completed the merger that gave it public company status within approximately four months after the E78 project manager was hired. This provided the company the required capital and access to further capital if needed to pursue its strategic vision. Several new acquisitions were made after accessing the new capital. The E78 team continued to implement new systems and improve processes after the merger to continue its successful path to achieving the company’s vision. The company’s enterprise value, reflected in its stock price, has continued to increase after becoming a public company.
