Executing a Carve-Out and Standing Up the Finance Function
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.
Carve-Out Planning & Execution
Finance / Accounting Assessment & Design
- 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.
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.