Case Study
Serving as CFO and Improving Performance
The Situation
A Cloud and Managed Hosting provider with 14 Data Centers worldwide, breached covenants in its credit facility and forbearance negotiations with its first and second lien lenders ensued. Mackinac Partners (acquired by Accordion in 2021) was engaged to quickly help the Company enhance its 13-week cash flow, monthly reporting, and ad hoc reporting.
Services
Interim CFO
Business Plan Assessment
Liquidity Management
Performance Improvement
The Execution
- Led the management team through the completion of a budget process with two key scenarios – a) realistic and obtainable, in order to rebuild credibility and b) dynamic and instructive, to serve as the primary tool for determining the reorganization needs of the company.
- Identified the need to generate $6MM in incremental annual EBITDA in to satisfy debt requirements and negotiate an exit from forbearance.
- Worked with management to assess every aspect of its business and identify savings opportunities including personnel reductions, negotiating new contracts, consolidation of office locations, implementation of monitoring tools, implementation of taxation software, and reduction of poorly performing marketing initiatives.
- Helped implement revised KPIs, providing visibility into actionable metrics to management and the Board of Directors.
- Led the reintegration of the finance department back into the sales-led organization to ensure fiscal and contract discipline.
The Results
Engaged as interim CFO, our team stabilized financial operations, revised budgets and business plans, and drove improved EBITDA from last month annualized run rate (LMA) of $9.3MM to $14.5MM in less than six months. With the turnaround well under way, the Company was successful in the recruitment of an industry veteran to serve as its permanent CFO.