Double success – less time, more yield

 

In a nutshell

GHK helped a financial investor to achieve his growth and yield goals much faster than planned. Today, the company continues to grow at a steep rate. Medium-sized businesses benefit from the financial expertise of GHK consultants, who are familiar with the perspective of the CFO from their own experience.

Within one year, GHK received a new project from the highly satisfied private equity fund. Again, GHK adapted the existing reporting and controlling instruments of a group of companies to the fund's requirements.

About the project

The project involved a health company wholly owned by a private equity fund. The goal was to increase the company's revenue from €20 million to €150-200 million by means of acquisitions in only three years. The health company's management consisted of one director and two managers of the second executive level.

As the advisory board designated by the private equity fund wanted the new company units to be integrated efficiently, a professional consultancy was to be integrated in the process. Even before the first acquisition, GHK was opted for, especially due to its extensive experience in the fields of accounting, IT, purchasing, HR, process management and project management. The objective was to harmonise the finance processes of the 14 new locations as soon as possible and to support the teams in the administrative units on site.

GHK reaches its goals in three steps: analysis, integration plan and execution

The analysis revealed that the companies lacked uniform reporting, cost centre accounting and cost object controlling. Moreover, there was no ERP system for the corporate governance, and the know-how and human resources required for integrating a group of companies were unavailable.

 

Based on the analysis, GHK elaborated an integration plan comprising about 300 individual activities. The range of units covered included controlling, marketing, quality management, HR, property management, purchasing and IT. GHK defined the duration of the activities as well as the responsibilities, timing and interdependencies among the activities.

 

To ensure the success of the execution, GHK supported the company's sole director by assuming the role of the CFO. GHK also provided missing controlling capacities in the acquired companies in order to prevent them from becoming growth stoppers.

 

In the course of the integration, GHK established a company-wide controlling system for controlling the revenue, liquidity, personnel efficiency and capacity utilisation. For this, the acquired companies' DATEV system was used in such a way that the needed data can be uploaded to the global controlling tool. For the personnel controlling, a separate Excel tool was programmed with an underlying Access database in order to consolidate the available transaction data from DATEV to six different HR indicators.

The accounting staff received training every time a new company was acquired. They needed to learn how accruals and deferrals, provisions, depreciation and amortisation must be posted according to the harmonised corporate guidelines.

Compelling results

Under the supervision of GHK as the overall manager of the "Integration" project, the processes in the fields of accounting, controlling, purchasing and IT were standardised according to a tried and tested master plan and harmonised with the financial investor's guidelines within a period of less than six months.

Thanks to GHK's support, the client achieved a tenfold revenue increase from €20 million to slightly more than €200 million within 24 months. As a shareholder, the renowned investor from the Frankfurt community reached his growth targets in only two instead of three years. The private equity fund achieved its growth targets and thus its value goals much faster (50 percent faster) than planned, enabling an earlier exit.

Apart from drafting the concept, GHK also provided operational support by supplying interim staff. In this way, no additional staff had to be recruited in the finance department during the project rollout. The harmonisation of the finance processes is implemented in just four months every time a company is acquired.

GHK continues to support the individual locations by providing human resources. In this way, reporting and controlling instruments are implemented speedily in all acquisitions. Actual/target deviations are analysed and discussed, and corrective measures are applied without delay. In this way, the company remains profitable despite the acquisitions.

Thanks to GHK's assistance, the managing director is able to take care of further acquisitions in addition to his operational duties. Moreover, GHK enables optimum reporting to the financial investor and to the advisory board – target/actual deviations are communicated along with the required analysis of root causes. The company benefits from the advanced consulting expertise of GHK, which is familiar with the requirements of financial investors and always delivers the right information.

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