FINANCIAL TRANSFORMATION AND IPO READINESS
Global Hospitality Company
On the heels of an international merger, an acquisition by a private equity investor, and a restructuring that reduced headcount and relocated company headquarters, a global hospitality company engaged FTI Consulting to transform the finance organization and prepare for an initial public offering (IPO). Our professionals partnered with a team of new finance leaders to develop complex financial models, fulfill various interim management roles, execute communications and change management plans, and manage several financial system and process improvement initiatives. Throughout a resource-constrained and segmented organization, the FTI Consulting team was instrumental in collaboratively driving improvements in the review, accuracy and timeliness of the financial consolidation and reporting process while leading the creation and standardization of key accounting policies and procedures. Our project management expertise frequently was tapped by the company to support high-impact enterprise-wide initiatives, including a global financial systems re-implementation, finance organizational realignment and company-wide preparation for an IPO, global debt refinancing and tax restructuring. The value derived from our work has been demonstrated in the efficient upgrading of the policies, processes and communications infrastructure, enabling the finance organization to drive corporate strategic initiatives in a cost-effective manner. Our colleagues continue to be agents of change to drive efficiency improvements while building a risk-aware culture.
FINANCIAL SYSTEM OPTIMIZATION
Premier Jewelry Designer
FTI Consulting was engaged by a premier luxury jewelry designer to assist with both business process improvement and finance department transformation. Our team developed critical solutions to improve upon organizational effectiveness in managing the order-to-cash cycle and helped the company increase customer service levels. Working capital management was improved, and inventory levels were reduced through diligent collaborative efforts between FTI Consulting and the company’s management teams. The company ultimately was better positioned to use technology, demonstrated improved process responsiveness through the inclusion of best practices and introduced requisite discipline in key processes. The strategic vision for finance was embraced, and the company is prepared for global expansion.
CARVE-OUT ACQUISITION SUPPORT
Global Chemical Company
After a private equity sponsor acquired a $5 billion subsidiary of a much larger, multibillion dollar chemical company, the new standalone company was left without an accounting or finance organization. FTI Consulting played the role of interim treasurer, controller and head of Financial Planning and Analysis (FP&A) to support the establishment of a finance organization. Our professionals managed all cash-related activities in coordination with the seller’s treasury staff. We built a global treasury function by hiring personnel in Europe, Asia and South America to facilitate the movement of cash among dozens of countries. FTI Consulting also led the creation of separate financial reporting, tracking reporting across several legal entities around the world. In addition, we developed an FP&A function to drive the near- and long-term budgeting and planning processes. Working closely with the sponsor and management, we established policies and procedures, and performed reporting and analysis across business segments. Through the course of our work, we assisted the company in forming relationships with key external stakeholders, including vendors, lenders and other capital providers. As a result, the sponsor and company were able to undertake a $600 million leveraged recapitalization, leading to a significant distribution to shareholders.
Restoration Hardware listed its shares on the New York Stock Exchange in November 2012, days after Superstorm Sandy wreaked havoc on the east coast of the United States. FTI Consulting helped the company develop and communicate its messaging platform; drive communications efforts to all key stakeholders, including investors, employees and the media; and execute a positive listing day. FTI Consulting successfully aided the company in outlining its strategic advantages in a market with many challenges. Activities included targeting and messaging advisory services during the IPO preparation process, as well as listing day support. Restoration Hardware traded up 30 percent on its first day of trading, and in the weeks that followed, it continued to command this premium. The company also outsourced its investor relations functions to FTI Consulting following the listing and has continued to leverage the firm’s counsel and support for the investor relations program.
IPO READINESS AND FINANCE PERFORMANCE MANAGEMENT
Mortgage Real Estate Investment Trust (REIT)
FTI Consulting assisted a global investment manager, with more than $10 billion in assets under management, in successfully launching a publicly traded mortgage REIT. Our professionals advised the company through the U.S. Securities and Exchange Commission (SEC) registration process. Within the finance organization, we helped implement web-based accounting and financial reporting software and acted as the REIT’s chief accounting officer. Our role included maintaining books and records of the REIT and its subsidiaries, determining key metrics calculations, performing REIT compliance testing, and preparing all financial statements for inclusion in quarterly and annual financial reports.
Global Car Rental Company
Following the acquisition of the business by a private equity investor and chief executive-led team, a series of engagements was embarked upon to augment efforts to revitalize the business. Working closely with the executive team, we assisted in the development of comprehensive financial models, served in interim management roles, and supplemented management resources in various financial and accounting operating areas. Our professionals were instrumental in establishing and managing key ad hoc systems projects focused on business intelligence to provide the chief financial officer with critical financial and operating reports to support the SEC and private equity sponsor requests. In addition, FTI Consulting added significant value in analyzing and facilitating asset sales and purchases. With our assistance, the company was able to successfully transition its headquarters across the country and prepare an S-1 shelf registration. FTI Consulting also provided the additional resources needed to prepare the company for ultimate sale to a competitor at a superior value for management and the private equity sponsor.
FINANCE PERFORMANCE MANAGEMENT
Waste Management Service Provider
The company, a provider of waste management services, recently had acquired a business saddled with material misstatements in historical and projected earnings. At the same time, the company’s core business was performing below expectations so it was behind on its integration efforts. FTI Consulting was retained and immediately reviewed financial statements for defalcations, errors and omissions. We also aided the company in gaining visibility into its operations and near-term earnings by developing and implementing operational metrics and key performance indicators. This included establishing a comprehensive strategic and financial planning process and presenting a revised plan to lenders and public markets, resetting their expectations and providing clearer, more accurate ongoing guidance. FTI Consulting facilitated the settlement with the seller of the recently acquired business, enabling the recovery of millions in cash and the forgiveness of deferred compensation.
A $1 billion direct-to-market apparel retailer was given 90 days to transfer all its cash management services for operations from a major money center bank after it had switched its credit relations from the bank. Sixty days later, the project had not commenced, and the treasurer resigned. FTI Consulting assumed the role of interim treasurer and worked on an expedited time frame to lead the development and execution of a plan to effectively transfer all cash management services to a new bank in 45 days; coordinate the systemic requirements for the transfer and receipt of information required to effectively manage the cash management cycle; reduce bank service fees by 35 percent; transition trade financing requirements from the old bank to a new service provider; develop a post-transition plan to more efficiently integrate cash management systems and information; and transition the process back to the company. The total time frame was approximately 50 days.