Elite Pharmaceuticals Inc (ELTP)

[NASDAQ2020]

The Role of The Acquiring CFO in Mergers & Acquisitions

The value an ACQUIRING CFO brings to a mid-sized company is well understood. At a high level, the CFO manages a company’s financial affairs, allowing the CEO to focus on day-to-day operations. But what does this broad definition mean when a company is cycling through a transaction process? For companies who are selling, raising capital or acquiring smaller businesses for growth, a CFO plays a vital role at every stage in the deal process.

Before the deal: creating the transaction plan

The beginning stages of a deal include extensive due diligence, whereby a CFO solidifies the story he will present to corporate stakeholders on expected outcomes. Whether on the buy-side or sell-side, the CFO considers financial questions about pricing expectations, value add, and risk. This research is both qualitative and quantitative in the earliest stages, as the CFO needs to be able to communicate an overall vision for the transaction to corporate stakeholders and align to the company’s “big picture.”

As this research progresses, it evolves into the numbers game one would expect to come from the CFO seat — setting financial requirements for Internal Rate of Return, EPS timelines, and even basic planning for acquisition financing can begin before a deal even takes place. Providing minimum benchmarks that the stakeholders both understand and agree with before entering a negotiation is an essential role a CFO plays in maximizing financial effi