Capacity, or the lack of it, can be a determining factor in whether a private equity firm moves forward and buys an entity or not. Even if the target is a profitable addition to a portfolio, or as a standalone portfolio company, not having the personnel to execute and manage the entity can cause a good deal to become cumbersome and the opposite of beneficial.

Our CFO Services team worked with a private equity firm that has acquired anesthesia management and staffing solutions provider. The private equity firm has recently acquired the provider and needed an interim controller function to support through the post-close transition.

Upon outset of the engagement, CFOx performed Purchase Price Accounting to determine what the private equity firm would be purchasing as a result of the acquisition including medical equipment and existing contracts.

Then, to establish a financial baseline for the client, CFOx created an opening balance sheet. This gave the accounting team a starting point to reference for all future financial planning and budgeting. This also allowed for smoother integration of a new, consistent financial reporting package, based on the opening balance sheet. The private equity firm was able to use the package to consistently review performance of the entity and confidently make decisions over the first few months of ownership.

With a starting point set, our team developed and implemented an accrual-based month-end close process, including a revenue recognition process while the client transitioned to a new revenue cycle management provider. Because the entity was previously a cash-basis company, this new process allowed the client a more accurate picture of the business in real-time.

Our team not only developed a consolidated monthly financial reporting package that included budget to actual analysis and covenant reporting, our team also assisted with and executed budgeting and forecasting initiatives.

The last piece of the engagement involved getting the entity audit ready by ensuring financial records, processes, controls, and supporting documentation were organized well enough for an external auditor to efficiently verify the accuracy of the financial statements.

The result was a stronger financial foundation, improved visibility into performance, and better decision-making during the first months following the acquisition.

If you would like to learn more about our CFO Services, please reach out via email (info@cfoxadvisory.com) or schedule a call directly on our Contact Us page.

Services Provided:

• Opening Balance Sheet
• Purchase Price Accounting
• Integration Support
• Financial Reporting Package