Benjamin Franklin once said “In this world nothing is certain, except death and taxes”. When it comes to private equity a third certainty is added: exits. And a proper exit preparation ensures you don’t sell your company below its full potential.
Utku Karaçomak has been with Sweav for 3 years. As a financial interim manager, he helps organizations achieve growth through M&A and financial management services. In this article, Utku dives into the common exit preparation pitfalls he observes in portfolio companies’ finance departments and how his new financial exit preparation service ensures a smooth exit process.
Utku explains that: “While information memoranda may look polished, the underlying financial infrastructure often struggles. This isn’t just about messy numbers, but also about employee turnover that may have impacted institutional knowledge and about finance teams already operating at maximum capacity for the day-to-day operations, leaving little room to manage a complex sale process.
This capacity constraint not only risks the continuity of regular financial operations but can also affect the quality of information provided to potential buyers during the sale process. When buyers notice delays or inconsistencies in financial information delivery, they might question the robustness of the finance function itself, potentially viewing it as an area requiring post-acquisition investment. This perception can negatively impact valuation and increase the buyer’s risk assessment.
You want to avoid that potential buyers get an “unheimisch” feeling. This will make them overthink the potential risks and bring down the offer. And selling your company below its full potential is not something you want, right?
There’s often a disconnect between the KPIs used for regular business monitoring and those that buyers and investors analyze from a deal perspective. Understanding and bridging this gap early is crucial.
In the past 14 years I supervised various mergers and acquisitions. What I’ve learned is that unpreparedness in your finance department doesn’t just leave money on the table – it can fundamentally affect buyer confidence and valuations.
Timely preparation rather than waiting until a sale process starts is key. This means incorporating deal-focused KPIs and analyses into regular reporting cycles years before a potential exit. This approach serves multiple purposes:
So, begin with the end – the exit – in mind.
A Sweaver can provide both flexible capacity to handle peak workloads and, more importantly, specialized M&A expertise. This dual benefit helps:
With my background as a Dutch chartered accountant at EY’s audit and transaction services practices, I understand how to analyze financial data from a deal perspective and manage due diligence processes to effectively showcase a company’s value to potential buyers. In doing so, it helps that I supported both sellers and purchasers in deals so I understand the underlying priorities and concerns of the stakeholders involved in the exit. I played the game sitting at both sides of the table, so I’m aware of what the seller is doing to get the highest bids but also know what the buyer will look at to determine his offer.
So, extra manpower it is. Sweavers have the brains and capacity to help with this. But don’t wait until the sale process starts. Start the work a few years earlier. Ask a professional to perform a ‘light due diligence’ (“quick scan”) to highlight the flaws and risks in the business’ finances. They can address these into a plan, giving the finance team a few years to improve the processes and systems.
That way, you make sure that not only the surface is shining, but you also have a well-functioning foundation, leading to increased confidence of potential buyers and driving up bids. This will also provide reassurance to investors and peace of mind to the portfolio company’s CFO.
I suggest making the quick scan an integral part of the value creation strategy, extending beyond immediate needs to address broader, strategic goals for the next five years.
This involves a detailed analysis of the financial processes, in alignment with KPIs that reflect investor expectations. By incorporating the improvements, companies can better prepare for exits by mitigating risks and positioning themselves as a fully professionalized company. Which will, in turn, make sure that you don’t leave money on the table.
Utku is a Dutch chartered accountant and financial interim manager with over 14 years of experience in finance and M&A. He partners with companies to realize their growth ambitions through strategic financial management focused on profit maximization, managing mergers and acquisitions, and streamlining financial processes. Outside of work, Utku lives with his girlfriend in Amsterdam, though his adventurous spirit often leads him abroad. Having worked in London and most recently in New York, he embodies the flexibility of freelancing.
