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Private Equity Case Study

A top five private equity fund portfolio company

Client

One of the top five private equity funds in the world acquired a global supplier of coatings to the transportation and industrial sectors in one of the largest-ever purchases made by the firm. The acquired company was spun out as an independent entity, with absolutely no finance function or infrastructure in place. Time was of the essence, and the private equity fund retained Morgan Samuels to fill the critical role of Chief Financial Officer of the spun out company – one of the most important hires they would make. The acquired company needed the right CFO in place quickly to serve as an essential strategic partner to the CEO in driving the business and building out the team, and to successfully transition the business into a standalone entity with an independent financial platform.

Considerations

The coatings supplier had previously relied on its corporate parent for many of its functions, including finance. Now re-branded as an independent organization, the new entity had to build its overall corporate infrastructure, a critical part of which would be finance. The new CFO would have a very limited amount of time to build an entire finance function essentially from scratch, which would then serve as a foundation upon which the company would continue to grow. The successful placement would have to be a sitting CFO – someone with depth of experience leading an entire finance function who had also served as a strategic thought partner to the CEO in achieving business objectives. Global experience was critical as well, as was a keen focus on cash management and forecasting, and the ability to identify areas for cost reduction. The ideal candidate would also be adept at working with a sponsor-led board, as they would be partnering both with the CEO and with key players of the private equity fund. An additional challenge was that the search was confidential.

The Morgan Samuels team was very clear on the front end as to the type of talent we were looking for and were very focused in our approach. We pursued multiple avenues, including other automotive paint manufacturers, Tier 1 automotive suppliers and automotive OEMs, then best-in-class industrial manufacturers and companies with known best-in-class finance functions. In addition to the attributes described above, we looked specifically for candidates with experience in continuous manufacturing, as opposed to discrete. To counter any hesitation to the confidential nature of the search and drive interest among potential candidates, we emphasized the opportunity to truly make an impact by shaping the financial platform of the company during this time of major transition.

Impact

Morgan Samuels reached out to over 260 potential candidates, out of which our client chose to interview four. The new CFO was identified and placed in only 65 days, far more quickly than the industry average. The placement was a sitting CFO for a food and beverage manufacturer who had depth of experience getting buy-in from multiple key stakeholders. This was our first search for this private equity fund. We have since been awarded multiple additional searches to continue to build out the coating supplier’s finance team, including the Treasurer and Corporate Controller/Chief Accounting Officer. The spun out company continues to thrive. It was recently ranked as the fifth largest coatings supplier in the world, according to Coatings World magazine’s Top Companies Report – the first year that it appeared in the annual report since becoming an independent company.