The private equity (PE) market in Ireland has grown substantially in recent years and continues to do so. As deal activity momentum builds, PE firms are increasingly looking to improve operational efficiencies in their portfolio companies, so they can maximise their return when they eventually exit.
Key to adding value is the role a CFO plays in telling the business's story and articulating its value. Sometimes, an internal CFO needs support to tell this story in a manner non-finance people can understand.
This is where the value story begins. CFO advisory at this stage helps a purchaser to see the value and the potential hidden risks. In addition to the traditional financial due diligence phase, we also recommend PE firms undertake a pre-deal finance function diagnostic and efficiency review. This involves an evaluation of the target company’s finance function to gain an understanding of opportunities and risks and provide cost-effective recommendations to optimise the target’s finance operations.
Experience in pre-deal diagnostics and traditional due diligence across the key areas of finance, tax, human resources, ESG and IT are crucial to understanding the risk profile of a target.
Once the target has been acquired and becomes a portfolio company, it’s time to strengthen the value story by cutting irrelevant plot points and focusing efforts on increasing value in the timeframe determined by the exit strategy. At this stage, the right partner and expertise are needed to address the concerns identified in the finance function diagnostic.
This expertise could include:
In circumstances of rapid growth, resignation of the existing CFO, or a lack of core skills in the portfolio company, outsourcing the CFO function is a practical solution.
Outsourcing general accounting services allows the story to continue. Outsourcing facilitates business continuity, effective management of growth, and places focus on strategic priorities, without internal staff being bogged down by administrative tasks or additional administrative overheads.
Outsourcing accounting, bookkeeping, and payroll processes may improve the efficiency of the year-end compliance process, allowing portfolio companies the time and resources required to focus on growing and developing their business. Outsourcing services often include:
As portfolio companies mature, their needs often extend beyond day-to-day finance operations. Whether navigating cross-border expansion, restructuring for scale, or addressing capability gaps in the leadership team, having access to experienced, commercial guidance becomes essential.
For private equity firms, ensuring this level of support is in place can be key to accelerating value creation across the hold period. BDO Entrepreneurial Services is a dedicated division to support fast-growing, venture-backed businesses with CFO-level advisory, investor-grade reporting, and scalable finance systems, without the cost or commitment of a full-time hire. Our team combines deep startup experience with the global strength of BDO to help founders lay solid financial foundations, expand into new markets, and make smarter decisions, faster.
Any good writer needs to have their story’s ending in mind. Forecasting allows PE firms to focus on their exit and their investors to gauge their future position according to different scenarios. This enables businesses to determine how they should allocate their resources and future budgets. The finance team can support businesses to:
CFO support can help you achieve a happy ending. In preparation for an exit, outsourced experts are integral to the due diligence process. An outsourced provider can ensure that business as usual continues while the due diligence process is ongoing. By handling the operational tasks, the existing team can focus on funnelling information into the due diligence process. From an operational perspective, services can include:
To mitigate unnecessary costs during the rapid growth phase of a business, PE firms should consider CFO support. By seeking this support, PE firms can re-focus their efforts on broader growth and strategic priorities to ensure they comply with investor obligations. Failure to do so may result in a loss of investor confidence, with implications for the ability to attract future investments.
PE firms can benefit from working with experts who are experienced in working with similar targets and businesses, offering specialised industry guidance and a holistic perspective that is crucial in maximising the value of the portfolio company.
BDO’s full range of services includes buy-side advisory, transaction services and due diligence, fund audit and tax compliance, tax structuring and exit readiness.