Looking at the 6 types of CFOs and their roles can help you think about finding a leader who aligns with your business strategy.
M&A or Exit CFO: Maximizing Value While Shaping Deals
While turnaround and M&A CFOs share some skills, their primary objectives differ fundamentally.
A turnaround CFO focuses on crisis management and operational recovery by cutting costs, optimizing cash flow, and restructuring debt for a struggling company.
An M&A CFO focuses on deal-making and growth by assessing acquisitions, conducting due diligence, structuring transactions, and integrating acquired companies. The key difference: recovery versus strategic growth and integration.
Core Competencies
The M&A CFO's primary focus is preparing for transactions and understanding how to maximize value. Family-owned businesses often engage consultants with this skill set when considering a sale.
This type of CFO needs several core competencies:
- Business valuation expertise is essential. “These CFOs understand how buyers think and what drives valuation in their industry,” Pattillo says. “They are experts at market analysis and using sophisticated valuation methodologies.”
- Deal-structuring skills allow them to negotiate terms and manage complex transaction processes. They understand not just the financial aspects but also the legal, tax, and strategic dimensions of deals.
- Financial analysis capabilities enable them to identify synergies and integration opportunities that create value beyond simple addition.
- Investment analysis skills help them evaluate acquisition targets and assess strategic fit before committing resources.
Integration Expertise
Integration represents a critical aspect of mergers and acquisitions, and the M&A CFO often leads this effort.
Systems integration requires merging financial operations and reporting across previously separate entities, a technically complex undertaking that must happen quickly to realize projected synergies.
Cultural integration involves managing organizational change as different corporate cultures come together. The CFO plays a key role in establishing shared processes and values across the combined organization.
Performance metrics must track integration success and synergy to show whether the deal is delivering expected value. The M&A CFO designs these metrics and reports on them to stakeholders who are watching closely to validate their investment thesis.
