Private Equity Case Study:
FORWARD Program

TRANSITIONING THE FINANCE FUNCTION TO A HIGHLY LEVERED ENVIRONMENT

CHALLENGE:
Finance Function Upgrades Needed Post-Acquisition

• A private equity fund acquired a manufacturer/distributor that lacked the formal financial management or a monthly close process required to comply with cash flow, financial reporting, and debt covenant requirements in a timely manner.
• An initial attempt with a staffing firm failed to provide the appropriate level of talent.
• The private equity fund needed to obtain a final working capital report in two weeks and a first-time audit report in less than 90 days, or incur financial debt covenant violations and penalties.

SOLUTION:
On-the-Ground Financial Transition Oversight

• CMF mobilized a team of two on the ground within five business days of approval to proceed.
• The CMF team took charge of the CFO/Controller function, quickly accessed the situation and implemented the action and resource plan needed to meet all financial deadlines, including:

- Completing year-end close including all GAAP adjustments
- Completing detailed inventory compilation and valuation of year end inventory accounts
- Coordinating and facilitating independent auditors for timely completion of first audited financial statements
- Completing Jan. – Mar. monthly accounting closes

OUTCOME:
Short-Term Compliance, Long-Term Improvements

• CMF submitted working capital calculation and all financial debt covenants on time and in accordance with all transaction and debt documents.
• CMF implemented a documented and sustainable monthly accounting close process.
• The CMF team executed a smooth transition to a permanent financial team within 120 days, and the full-time CFO started, from day one, playing “offense” with actionable information.

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