Who owns finance in the first 90 days after a PE acquisition?
Curious how lower middle market PE firms handle finance right after closing a deal.
The diligence team is gone, a controller often isn't hired yet, but the first close and working capital true-up are coming up fast.
Who usually handles it?
- The PE firm?
- A fractional CFO?
- The existing team?
- Someone else?
We're researching this space and would love to hear how it works in practice. What's the biggest challenge in those first 90 days?
Typically the existing team w/ support from the junior team at the PE firm if needed on the WC true up. Have had one deal where an external consultant (from CBIZ iirc) was brought onsite to help standup some reporting / first close but usually it's just the existing controller/VP finance/CFO.
Biggest challenge is typically just getting the team used to PE reporting and deadlines. Teams used to really long close processes suddenly scrambling to tighten that up for monthly lender reporting + PE weekly/monthly KPI reporting.
Super helpful, thanks. Two follow-ups if you don't mind: (1) What happens on smaller deals where the target is founder-owned and the 'existing team' is basically a bookkeeper, no controller or VP finance? Does the PE junior team just absorb it? (2) Roughly how much associate time gets eaten by the WC true-up and reporting standup on a typical deal? Trying to understand where it hurts enough that firms bring in someone like CBIZ vs just grinding through it.
A CFO / Director of Finance is typically one of the first hires post-close at my LMM firm if the Company doesn’t have one.
The deal team will always help out as well, and we still have to engage third party service providers for the NWC true-up and audit.
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