The CFO Impact on Exit Value

Private equity (PE) professionals have high expectations for the extent to which the CFO can positively influence the PE portfolio company (portco) exit value. First in value creation, then in realization, the portco CFO should play a central role in the exit process. Successful exit experience is a desired competency we seek in our targeted CFO prospects. CFOs who have played leadership roles in successful exit transactions understand and embrace their role in the exit process and are confident in their ability to influence value and achieve a successful outcome.   

During an exit transaction, the CFO becomes the key player. The CFO owns the quality of data and financial forecasting of the company’s current and future performance critical to a valuation that will deliver high multiples for investors and the leadership team. CFOs play a key role in building credibility in the eyes of potential buyers by skillfully articulating the business model and providing credible evidence which supports the growth story. When this is achieved, it can materially impact value, providing potential buyers the confidence and understanding to pay a price which meets the expectations of the company.  

Exit planning in a portco environment starts from day one. Careful exit planning which identifies and mitigates potential risks and exposures will defend against value leakage.  Creating an exit mindset within the management team can bring increased focus to business performance and progress versus strategic plan. The CFO has a lead role to play in keeping the business focused on the end goal, challenging decisions and ensuring the financial disciplines are in place to turn the strategy into a reality.  

Harvest CFO provides executive search for permanent placement as well as contracted financial leaders for interim roles. For more information about Harvest CFO contact Don Hillier, CEO at 216-609-3033 or email dhillier@harvestcfo.com.