Interim Financial Management Following a Carve-Out

SCENARIO
Lack of financial leadership post-acquisition

Portfolio company was a spin-off from an entity operating in a largely unrelated business purchased by a private equity firm in a leveraged buy-out.

The carve-out entity lacked the financial leadership to transition the company from its former parent and to move the company forward in a private equity owned, highly leveraged environment.

APPROACH/ANALYSIS
Financial monitoring and oversight

Laurus’ approach included: 

• Establishing an opening balance sheet supported by relevant accounting literature.
• Designing and implementing meaningful management reporting, reflecting appropriate financial and performance metrics.
• Developing a debt covenant compliance tool.
• Creating a 100 day plan to transition the company from the former parent.
• Assisting with the transition to a new accounting software package.

OUTCOME
Transition to portfolio company management

Within 60 days, we accomplished our goals and transitioned the financial monitoring activities to the portfolio company management team, which included a newly hired Chief Financial Officer.

Laurus also established working capital and cash flow forecasting tools to assist with managing debt covenant compliance.

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