Business Services
Select one of the case studies below:
Business Services - €150m turnover
Interim CEO
We were asked to assist a parcel delivery company with sales of around £100M. The company had been acquired by a private equity house three years earlier for a consideration of 1.2x sales.
To justify the price sales had been increased substantially, although little investment was made in the company. This resulted in poor customer service and high operational cash leading to losses of £2M per year and impending receivership.
The interim CEO quickly determined that much of the additional sales volume was at uneconomic prices and that operational discipline had disappeared. Steps were taken to negotiate pricing or terminate contracts, and strengthen the operational management and introduce formal systems to control the nightly sorting of the parcels.
The company returned to profitability over a 6 month period, before the balance sheet was restructured through a debt for equity swap and a small amount of new bank debt.
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Business Services - €400m turnover
Interim CFO for MBO Team
The CEO of the team planning to buy out a £70M division had been negotiating the deal for sometime. Strategic plans at the existing parent company were creating delays. The time lag caused the intended Finance Director to pull out of the deal leaving the CEO in need of an immediate replacement.
The client’s primary concerns were:
- Sector knowledge
- Experience of leveraged capital structures
- Significant sized, fully listed Plc experience
- Commercial agility
- Personal chemistry with all intended board members
- Absolute confidence in integrity and confidentiality
Having identified a suitable candidate from a shortlist of three, the client appointed successfully and in the course of the assignment to date, the interim Finance Director has:
- Established personal and professional credibility with the backers, the divesting company and the MBO team
- Played the lead role in detailed financial, legal and commercial negotiations
- Scoped and shaped all operational finance and IT structures for the Newco
- Negotiated the timing and detail of anticipated back office issues following separation from the parent company
- Acted in a lead capacity on pricing issues around the disposal
- Conducted highly sensitive meetings with customers
- Prepared 3 and 5 year strategic plans for the NewCo
- Brought a sense of order and calm to an atmosphere that had historically been volatile
- Been able to support and mentor the CEO throughout the process
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Chief Executive Officer
Restructuring – Distribution
England
A private equity backed vehicle parts distribution company with over 50 UK locations had suffered several years of losses after a MBO. Over the next few years the investor attempted to improve results via a succession of industry experienced Managing Directors to no avail. Eventually a review was undertaken by the investment director and the Non Executive Chairman which resulted in the search for an experienced interim executive with successful turnaround credentials.
The assignment was complex given that the company’s operations were multi-site, and upon a detailed review, had been managed in a style largely unchanged for many years. Compounding the problem were long entrenched employees and an outdated in-house computer system. The investor was looking to realise its investment in about a 2 year time horizon, which necessitated a quick turnaround and the establishment of a profitable growth phase.
The Interim CEO immediately began by recruiting two new operations heads, ‘retiring’ several long serving managers (both in corporate and in the field) as well as the old FD (replaced by an interim FD), replacing the internal audit team, reducing overall headcount by 10%, requiring new daily and weekly cash flow monitoring, and introducing a new modern IT system.
The company’s cash position and profitability were improved by selling a few non-essential (and very valuable) freeholds, negotiating a debt for equity swap, and improving working capital in part by reducing stock holdings and centralizing the company’s procurement process after hiring the company’s first Heads of Procurement and Product Management.
The 12 months assignment drew to a close with the company’s net worth returning to a positive figure, sales increasing by 15%, client retention improving by 10%, the interim FD being named the CEO, and a permanent FD being sourced and hired.
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