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Case Study

Executing a Carve-Out and Standing Up the Finance Function

Team Size
1 Managing Director, 1 Director, 1 Vice President
Project Duration
6+ months

The Challenge

A Sponsor was pursuing the acquisition of a global human resource consulting business generating approximately $280 million in annual revenue with 1,600 employees through service offerings in the U.S., Canada, and the U.K. The Company was to be divested from a $6.5 billion public company, who would provide overhead function support via a Transition Services Agreement while the divested entity stood up its own Finance & Accounting, IT, HR, and other functions as a “greenfield” company. The Seller’s key business processes (Order-to-Cash, Procure-to-Pay, Record-to-Report and Hire-to-Retire) were inefficient and would need to be right-sized for the divested Company. The Sponsor engaged Accordion to support the overall carve-out planning and execution, in order to develop and establish the Company’s standalone Finance & Accounting function.

Services

Carve-Out Planning & Execution

Finance / Accounting Assessment & Design

The Execution

Diligence

  • Standalone Costs Model: Reviewed the Seller’s pro-forma standalone overhead costs for G&A (including Finance & Accounting, Human Resources, Legal, Marketing, Real Estate) and developed a financial model of standalone run-rate costs and one-time carve-out costs.
  • Transition Services Agreement: Supported the Sponsor through numerous iterations of the TSA, including Seller negotiations, and subsequent operationalization of the TSA through governance and new transitional processes between the Company and Seller.
  • Finance & Accounting Function: Developed an organization model for the Company’s F&A function by conducting Q&A with Seller’s F&A leads to understand the current Order-to-Cash, Procure-to-Pay, Record-to-Report, and Hire-to-Retire processes.

Post-Signing & Close

  • Cash Management: Developed and maintained a 13-week, monthly, and daily cash flow forecast to closely monitor cash and debt globally (U.S., Canada, U.K./EMEA) and manage Lender covenants and testing.
  • Management & External Reporting: Supported weekly and monthly Management, Board, and Lender reporting requirements.
  • TSA Operationalization: Planned for and implemented new TSA finance processes between the Company and Seller, and partnered with the CFO to develop and run the finance function.
  • Banking & Treasury: Managed and executed projects to open new standalone bank accounts, transition acquired bank accounts, and implement lockbox and other treasury products across 35 bank accounts at 7 banks in 8 countries under tight deadlines.
  • Shared Service Center in India: Played a leadership role to develop the strategy and execute setup and hiring of a 250+ employee shared service center in Chandigarh for offshore Finance & Accounting, IT Software Development, and Operations functions.
  • Audit and Tax: Led the Company through its first standalone audit and tax filings, purchase accounting, and subsequent balance sheet transformation to move offline financials into the new standalone ERP system.
  • Accounting: Developed and validated accounting policies for the standalone Company.
  • Annual Budget: Supported the CFO through the first standalone budget process.

The Results

Our Accordion team was critical to the carve-out planning and execution for Day 1 (closing) and Day 2 (exiting the TSA and all support from Seller). We continue to support the Sponsor and  Company with overall carve-out execution and leadership of the Finance & Accounting stand up.

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