Case Study – Private Equity Firm Portfolio Company Sale

Background:

A private equity firm desired to sell one of its portfolio companies. The company, with sales of $75 million, was a leader in the fashion industry. The incumbent Chief Financial Officer and Controller left at the start of the sale process.

Problem:

The company could not hire another full-time Chief Financial Officer and Controller as it was actively engaged in the sale process. It needed two people for the short term who could work with its PE owner, the investment banker, the potential buyers, lenders and other stakeholders, and at the same time, continue to produce required financial information and to liaison with its auditors.

Contributions:

The PE firm reached out to CFO Consulting Partners (CFOCP) to provide an Interim CFO who could handle both the CFO and controllership responsibilities, and who could provide financial management leadership to the company during the sale process. One of CFOCP member’s was retained by the company.

During the initial phase of the engagement, the Interim CFO took total charge of the Finance Area. The Interim CFO’s direct areas of responsibility included Accounting & Finance, Information Technology, Human Resources and Legal. He was instrumental in accelerating the closing process by up to two weeks, and he enhanced the HR area by outsourcing a portion of the function. In addition, he was able to recover certain funds by investigating nuances of certain long term contracts and participated in direct negotiations of certain contracts and leases.

During the potential buyers’ due diligence processes, the Interim CFO fielded and directed all due diligence responses. He also played an active role in the Management Presentations. This posed a tremendous challenge as the sale process was not disclosed throughout the Company.

Results:

CFOCP, which specializes in providing senior-level financial management services, provided such an experienced CFO from its team. CFOCP supported the Company with various accounting and M&A services. The CFOCP member became an integral member of the management team. The needs of all stakeholders were met, and the sale was successfully completed. Subsequent to the sale, the buyer group retained the CFOCP member to assist with accounting integration, purchase price accounting and a subsequent refinancing. In addition, the CFOCP member provided valuable institutional knowledge to the buyer group.