Services

Sarbanes-Oxley Consulting | Transition Management | Mergers and Acquisitions | Corporate Turnaround

Situation: With its 3rd quarter filing requirements looming, the management of a $3 billion public company desired to take on what all public companies will face in 2003; assessing its financial reporting internal controls and developing a consistent reporting system to enable management certifications, which can be easily updated. Given that financial information systems design and development is a precluded service offering by the company's independent accounting firm under Sarbanes-Oxley, the company needed expert guidance to assist them in this endeavor. Moore Colson delivers.

Action: Moore Colson met with financial management, internal audit and the company's independent accounting firm to develop an implementation plan. Using the COSO internal control assessment model, the Sarbanes-Oxley Act and SEC regulations as its guidelines, internal control components were assessed, documented, tested and evaluated as to their overall effectiveness. Reporting tools were developed for presentation to the Audit Committee and the CEO and CFO. Test results and evaluations were linked by these reporting tools into the certifications required of the CEO and CFO to the SEC in its 10-Q.

Result: As a result of creating these systems, the company will be able to use its own resources to assess its financial reporting internal controls for future quarterly and annual filings on a consistent basis. The assessment and reporting systems created built a foundation for the anticipated requirements of Section 404 of the Act, thus placing the company out in front on the Sarbanes-Oxley learning curve. Yet most importantly, the CEO, CFO and the Audit Committee were able to confidently assess financial reporting internal controls based upon the recommendations and conclusions reached.

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Situation: An equity sponsor desiring to acquire a $25 million manufacturing and distribution division of a publicly traded company engaged Moore Colson to provide transaction support, ensure day one operational effectiveness and oversee the management, financial and information technology transition to an independent, stand-alone organization.

Action:
Due Diligence - Verified the reasonableness of assumptions in the business model and forecasts of performance and cash requirements; assessed the effectiveness of the existing systems and controls; assessed the existing personnel capabilities and transitional needs.

Negotiation Support - Verified cash flow and financing requirements; assisted lender in gaining understanding of collateral and financing needs; assisted buyer in assessing lender's perspective and position as well as in assessing and negotiating required seller support; assessed and coordinated 3rd party resource needs (i.e. insurance, employee benefits, telecommunications, cash management and payroll services).

Day One Effectiveness - Assessed, developed and documented critical systems and control procedures; assessed personnel requirements and trained existing and new personnel; coordinated critical functions and requirements of the buyer, seller, lender and 3rd party service providers; conducted an IT assessment focusing on operational effectiveness at acquisition completion, IT platform comparisons and IT systems design; established independence of e-mail, internet, telecommunications, remote, web site and application software; provided man-power and support during ¿day-oneî operational transition.

Ultimate Transition - Recruited and trained permanent management and financial personnel; coordinated transition of responsibilities and services from the seller.

Result: Moore Colson was able to provide superior management and technical support by effectively assessing the needs of the buyer, seller, lender and 3rd party service providers. The entire project was accomplished while continually communicating with stakeholders throughout the transition process. Within a 45-day period, Moore Colson was able to successfully establish the acquired division's independence from the parent company with minimal disruption. In addition, during the first six months of independent operation, the accounting software transition was completed. Moore Colson's team approach and previous experience in transition management services was key to the success of the company's independence.

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Situation: A manager of a $30 million division of a Fortune 100 Company desired to purchase the division. He asked a potential financing and equity sponsor who he should call to assist him in the acquisition process. The answer - Moore Colson.

Action: Moore Colson responded immediately by meeting with the manager to assess his goals and objectives. Moore Colson assisted management by evaluating and obtaining an experienced CFO; preparing a business plan and financial models to assess and solicit debt and equity needs; performing due diligence efforts to evaluate the value of the division; negotiating purchase price and financing structures; and assisting in the closing and post-closing settlements and dispute resolutions.

Result: The manager successfully completed the acquisition with debt, equity, and seller financing and achieved first year performance in excess of plan. Moore Colson continues to support the company through year-end audit and tax planning as well as information technology services.

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Situation: A third generation, family-owned $50 million textile operation experienced eroding profits, then climbing losses, and cash shortages. The lender required the company to seek outside advice to evaluate its problems and suggested three potential firms to use. The owner's choice - Moore Colson.

Action: Moore Colson evaluated the management organization, financial information systems and controls, and product profitability and found significant deficiencies in product costing systems and operational planning. Moore Colson presented its findings and recommendations to modify existing costing systems and reduce the variety of products manufactured.

Result: The company modified existing costing systems to provide reliable product and customer profitability and to reflect meaningful operational performance against standards. As a result, the company eliminated unprofitable products and customers and returned to profitability on 20% less volume within one year.

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