Case Studies

VC-backed buy-out of a family-run building products firm

Venture capital backed buy-out of a family-developed building products firm, designing and distributing air conditioning condensation pumps worldwide

When the founder decided that they had grown the business as far as they could, they were able to realise some of their wealth and secured funding and experienced management for the company’s future expansion by way of a VC-backed buy-in, led by a new CEO and our FD, Chris Backhouse. The VC was given a limited period to effect the acquisition and needed an interim FD at short notice to join the team.
Chris developed detailed financial projections as a part of the business plan that supported the proposed funding and which modelled the key drivers of the business – sufficiently accurately, that input of product volumes, prices and margins replicated prior year results as well as giving an indication of the future potential.

Implemented monthly management reporting and cashflow forecasting

Management accounts were relatively simple and did not include any analysis of the results and implication for operations. Chris developed the accounts, reporting key performance criteria to the Board monthly and against the plan, ensuring banking covenants were closely monitored and good relations with the company’s bankers maintained.
Chris also monitored the company’s cash flow and foreign currency exposures, establishing policies and implementing foreign currency hedges and forward cash flow forecasting. Debtor collections were closely monitored and reported and risk exposure by country set.

Developed and assisted client’s finance team

Chris worked with the client’s finance staff to develop the accounts function and their roles, including the founder’s long standing part-time financial controller. The complexities added by the VC’s involvement – detailed banking covenants and foreign currency hedging instruments – prompted the FC to resign. Chris minimised the potential cost and disruption to the business by persuading her that by working in tandem, she could continue to focus on those tasks that she was familiar pending the appointment of a full-time FD.

Worked with the CEO to execute the 100-day acquisition plan

Chris was closely involved, together with the CEO in the development and execution of a 100-day post-acquisition plan for the business. The plan addressed the risks noted and areas requiring immediate improvement identified during the acquisition due diligence process and seen as key to underpinning value in the business after the change in ownership.

Managed transition to full-time FD appointment

Having seen the process through from due diligence and fund raising to a successful acquisition and implementation of the 100-day plan, Chris handed over a smoothly operating finance function to the full-time FD.

The business exceeded its forecast growth and profitability in its first year post-acquisition, expanding by over 20%.