Case Study: Interim CFO Positions Streaming Service for Successful Sale
Removed $120 million of contingent liabilities from the balance sheet and ensured company profitability.
Client:
VC-backed streaming service
Services:
- Interim Executive Services
- Interim CFO
- Turnaround
Industry:
- Private Equity
- Media & Entertainment
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Our Challenge
A venture capital-backed streaming service needed to stabilize its increasingly dire financial situation stemmed from staggering losses. With a $20 million mezzanine loan looming, the company lacked the means to cover the balloon payment and remain solvent and operational. Running out of cash and time, the company turned to Focus Search Partners (FSP) for immediate help and engaged one of FSP’s interim CFOs, an experienced media and entertainment industry veteran.
Solutions & Outcomes
- With just three months to ascertain the best path for the company before the mezzanine loan payment was due, the Board of Directors (BOD) and executive team realized that Chapter 7 or 11 restructuring was the likely outcome for the business. Our interim CFO quickly realized that this strategy would not yield a sustainable business post restructuring; therefore, the company moved forward with a different plan.
- Leveraging his transformation expertise, our consultant guided the company from its loss-making business segments to a cashflow positive business. This new path would secure investor interest and the liquidity and resources needed for the impending loan maturity, and for focusing on the profitable/growth segments of the business. With BOD approval, he spent the next month renegotiating or terminating key contracts that were contributing to the company’s multi-year losses.
- FSP’s interim CFO had the practical knowledge, relevant experience and expertise to develop a creative solution; collaborate and communicate with the company’s board, CEO, and team; gain consensus; and quickly develop and execute the strategic plan.
- Halted marketing and customer acquisition efforts negatively impacting profitability
- Negotiated a loan extension
- Terminated and negotiated key contracts, increasing profitability for the company
- Achieved 10% year-over-year positive impact on SG&A expenses, First profitable quarter in six years, 50% reduction in annual loss relative to budget
“Focus Search Partners’ interim CFO instantly became a trusted, respected, and valued part of the team. He quickly got up to speed on our business and had creative ideas on how to counter key roadblocks and issues. He adapted to our culture quickly, which was no small feat during a pandemic; he was calm under pressure; and he took the time to mentor and develop the team as he executed the plan. He is the consummate professional and the perfect person to tackle the hard jobs.” - Chief Executive Officer
Results
Profitability
Removed $120 million of contingent liabilities from the balance sheet
Growth
Forecasted $10 million EBITDA for 2021
Sustainability
Saved 200+ jobs
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