When a San Francisco-based private equity firm with a $1B portfolio decided to acquire a luxury apparel company, they faced a significant obstacle. The company was undergoing a critical audit that would influence the final purchase price, but their controller suddenly left, leaving the process in jeopardy. CSuite Financial Partner’s Jeff Durbin stepped in, leveraging his expertise in financial reporting and turnarounds to resolve the numerous financial and operational issues. This case study highlights how Durbin helped ensure the audit and acquisition stayed on track.
Challenges
When Jeff Durbin arrived, he quickly uncovered the following issues impacting the audit and financial health of the apparel maker:
- Neglected financial tasks: Bank reconciliations hadn’t been performed for two years.
- Audit complications: The audit had to be navigated with two separate auditing firms.
- Weak accounting policies: The company’s existing accounting policies were either inadequate or non-functioning.
- Complex insurance negotiations: The company was involved in a sensitive multi-million dollar insurance settlement.
- Global reporting implementation: The parent company in Milan was implementing a new global reporting system.
Solutions
Durbin’s extensive background in financial turnarounds allowed him to lead a team and implement the following solutions:
- Completed two years of bank reconciliations on over two dozen accounts, discovering $750,000 in dormant funds.
- Successfully navigated tensions with auditors to complete the audit to the satisfaction of both the company and the private equity firm.
- Implemented missing accounting procedures to improve financial controls.
- Organized and documented a multi-million dollar insurance claim, ensuring accurate tracking of business interruption expenses.
- Collaborated with the Milan-based staff to convert the company’s management reporting package into the format required for the new global reporting system.
Outcome
Jeff Durbin’s partnership with the luxury apparel company lasted for seven months. His leadership helped the company complete its audit and sale successfully, allowing the acquisition to proceed. Though the new CEO of the apparel maker invited Durbin to stay on, he opted to take a CFO position at another portfolio company within the private equity firm.