Case Studies

nettle-bay-partners-case-studies

Sale of Company

Client: Provider of fiber-optic cable services

Problem: The company’s financial reporting system did not provide timely, accurate and actionable information to management. The company had only a bookkeeper and relied on an outside accounting firm to prepare financial statements, thwarting the company’s ability to make daily business decisions and consider its strategic options. Also, the company’s private equity financing was approaching a renewal date, and accurate financial information was needed to avoid a costly change in terms or, worse yet, non-renewal. Additionally, shareholder dissension meant the company had to be sold, but that couldn’t happen without conforming financial statements and a resulting valuation of the company.

Solution: Nettle Bay Partners improved the internal accounting processes, transitioned to a new accounting firm, and developed the information the company needed for an audit, all of which added credibility to the company’s valuation. Nettle Bay Partners assisted in the refinancing of the company’s debt with its private equity lenders under the best possible terms and conditions. Next, we helped develop timely and credible financial information to support the ultimate purchase price. We also provided support, in the form of managing operational and business processes changes, to the acquiring company on the ownership transition.

Result: The company was sold for $60 million, a 10-times multiple of EBITDA.

Healthcare organization caught in industry consolidation

Client: Multispecialty medical practice

Problem: This client, a physician-owned practice, facing declining referrals from other doctors whose practices were being acquired by hospitals and larger practices, struggled with shrinking revenue. The client’s antiquated business processes and management tools prevented the firm from properly deploying human and capital resources and from billing and collecting patient revenue in a timely fashion.

Solution: Nettle Bay Partners was hired as the interim chief financial officer. Our first task was to stem the loss of referring physicians. To do so, we developed a scalable, repeatable methodology for acquiring referring medical practices. We also revamped the billing and collection function, compressed the service-to-cash collection cycle by creating incentive programs for the billing and collection staff as well as improved business processes, and engaged third-party billing and collection agencies where those activities exceeded the capability of internal staff. Nettle Bay Partners instituted an effective budgeting process and improved management-level financial reporting.

Result: The client increased the number of referring physician practices by 50% and reduced the average number of days outstanding on its accounts receivable from 120+ to under 60 days. Management is now able to forecast and measure financial results. Nettle Bay Partners spearheaded the effort to refinance the company’s debt under the most favorable terms and conditions.

Technology company struggling to manage growth

Client: Venture capital-funded software company

Problem: Facing exploding growth, the company was overwhelming its accounting and finance functions. It clearly lacked the infrastructure to scale for growth. The company’s primary competitors were large, publicly traded entities with deep pockets. Our client had already acquired most of its large, international customers that were using its solution, and in order to expand its operations globally to properly support and continue to attract this international customer base, it needed to raise venture capital. Its accounting and finance function was incapable of supporting existing reporting requirements and providing the financial information required by additional capital raises.

Solution: Initially, Nettle Bay Partners was recruited to develop scalable accounting and finance functions. We created the financial reporting methodology for daily decision-making, stakeholder reporting, and venture capital fundraising efforts. To support international expansion, we:

  • hired law and accounting firms in each market
  • developed consolidated reporting methodology for multiple foreign currency operations
  • created the financial package for additional venture capital raises.

Result: The company entered 13 new international markets, raised an additional $55 million in venture capital financing and had the necessary compliance and reporting infrastructure in each jurisdiction.