Healthcare Service Company Increases Revenue & Successfully Sells to a Strategic Buyer via Interim CFO Solutions
Overview
The client — an operator of approximately 10 plants that offer industrial laundry services to healthcare and hospital facilities — engaged Bridgepoint for interim CFO services to support them through a strategic transaction.
Business Challenge
After the short-term resignation of their CFO with little notice — and as PE ownership needed to realize the value of their investment by exiting to a strategic buyer — the client identified a need for strong CFO leadership to oversee the day-to-day operations of their business and establish successful collaboration with the various stakeholders involved in the transaction.
In addition, due to the high interest rates that permeate today’s financial landscape, the client was also running into issues stemming from working capital.
Lastly, the client also lacked the in-house expertise to lead the accounting, finance, HR, IT and operations of the business while juggling the many requests from PE ownership, prospective buyers and the various due diligence consultants evaluating the details of the proposed transaction.
Approach
After a series of discovery meetings to identify the client’s key business needs, goals and drivers, the Bridgepoint team worked diligently to build and track a 13-week cash forecast to help the client overcome issues with working capital. We also established regular reporting and communication with the CEO, Board and Lenders to keep them informed regarding progress.
In addition, our interim CFOs also implemented price increases with customers and established a cash committee to review cash-related issues and improve activities on a weekly basis.
Next, team Bridgepoint conducted AP and AR analysis to collect aged receivables. Lastly, our consultants established ongoing reporting measures and responded to requests from due diligence, Quality of Earnings, and other consultants involved with the acquisition to provide the client with more room to focus on key growth initiatives.
Results
After engaging Bridgepoint, the client was able to steady the financial operations of their business and facilitate a successful sale to a strategic buyer – and with a much higher valuation due to our improvements.
In addition, after the implementation of a detailed 13-week forecast, the application of AP and AR management best practices, and the increase of prices for their services, the client was also able to improve their working capital situation and increase revenue.
Before Bridgepoint
- Working capital issues
- Challenges navigating PE stakeholder requests as a result of their recent transaction
- No in-house expertise for management of accounting & financial operations
After Bridgepoint
- Increase in revenue
- Streamlined communication processes with stakeholders
- Increased valuation & successful sale of their business to a strategic buyer