$75 Million Saved for PE-Backed Health Organization
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December 22, 2023
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Overview
Through interim management support, FTI Consulting helped a private equity-owned behavioral health organization achieve significant cost reductions and successfully complete its sales process.
Our Impact
- FTI Consulting’s cost-savings plan ultimately led to approximately $75 million in annualized operating expense reductions.
- FTI Consulting’s interim FP&A support helped the client significantly improve reporting and forecasting capabilities, allowing it to focus on growth, expanding profitability, and effectively price and negotiate contracts
- Following a more than 12-month due diligence period, the transaction closed at the equity sponsors’ targeted value.
Situation
After undergoing a merger, a leading private equity-owned behavioral health organization suffered operational issues stemming from management’s focus on growth rather than operations. On track to significantly miss its financial plan targets, the organization replaced nearly its entire executive team with new leadership tasked to fix the operational issues and accelerate growth. The equity sponsors positioned the organization for a sale and engaged FTI Consulting to provide interim management support during the sales process.
Our Role
- FTI Consulting was retained as the organization’s interim CFO and senior vice president of financial planning and analysis (“FP&A”) and supported the expansion of the FP&A function.
- FTI Consulting’s Office of CFO Solutions (“OCFO”) team led the finance function through the sales process and implemented a rigorous cost savings plan to get the organization on track to achieve its financial targets, and assisted with cash flow forecasting and liquidity management.
- The OCFO team built a detailed profitability model to allocate shared service costs across the entire business to understand profitability per client, this also established a formal partnership structure to provide business operators with finance partners to drive key strategic initiatives and improve financial performance and transparency.
Related Insights
Related Information
Published
December 22, 2023
Key Contacts
Senior Managing Director, Co-Leader of Merger Integration & Carve-Outs
Senior Managing Director