Case Study: CFO for a PE-Owned Manufacturing Company

Background

Our client, a European mid-market manufacturing group with €80 million in annual revenue, had built a strong reputation in the industrial components sector, supplying both OEM and Tier-1 customers across automotive, machinery, and energy industries. With production sites in three countries and long-standing client relationships, the business had a solid foundation of recurring revenue streams and a diversified customer base.

Two years prior, the company was acquired by a mid-market private equity firm with the ambition to accelerate growth through operational improvements, geographic expansion, and a potential buy-and-build strategy. As the company prepared for its next growth phase and a targeted exit in 4–6 years, the Board recognized the need to appoint a Group Chief Financial Officer (CFO).

This CFO role was mission-critical: the business required financial professionalization, stronger performance management, and a clear capital strategy to fuel growth initiatives while preserving margin resilience.

This marked a pivotal moment in the company’s evolution—from a family-led, entrepreneurially run manufacturer to a professionally governed, private equity-backed growth platform.

The Challenge

The CFO search came with a number of complex and interconnected challenges:

Professionalization of Financial Structures The company lacked group-wide financial consolidation, standardized reporting, and investor-grade KPIs. The incoming CFO needed to establish a modern finance function capable of meeting the transparency and speed expectations of the PE sponsor.

Operational Performance & Margin Pressure While revenue growth was steady, margins were under pressure due to rising input costs and supply chain volatility. The CFO had to implement rigorous cost control, margin analysis, and working capital optimization to safeguard profitability.

M&A Readiness & Integration Capability The PE sponsor intended to pursue bolt-on acquisitions to accelerate growth. The CFO needed prior experience in M&A processes—from financial due diligence to integration of acquired entities.

Capital Structure & Debt Management The company operated under a leveraged buyout structure. The CFO had to manage banking relationships, covenant compliance, and refinancing scenarios while ensuring adequate liquidity for expansion projects.

Cultural Shift & Leadership Transition The finance function had previously been more transactional than strategic. The incoming CFO had to elevate finance into a value-creating partner for the business, while building credibility with both the management team and the PE sponsor.

Solution

We partnered closely with the CEO and PE operating partner to design and execute a CFO search strategy targeting financially disciplined leaders with both manufacturing and private equity experience.

Key Steps in the Executive Search Process

• Stakeholder Alignment: Conducted in-depth interviews with the CEO, PE operating partner, and plant GMs to define the success profile, key priorities, and cultural expectations for the CFO.
• Targeted Market Mapping: Focused on CFOs and Finance Directors from industrial manufacturing businesses across Europe with revenues between €50M and €300M. Special emphasis was placed on candidates with PE experience, cost management expertise, and M&A exposure.
• Financial Acumen & Investor Readiness: Assessed candidates’ ability to deliver high-quality reporting, manage debt structures, and lead board-level financial discussions with confidence.
• Assessment & Validation: Combined structured interviews with financial case studies and investor references to validate candidates’ leadership, analytical rigor, and track record in margin enhancement.

Results

The selected CFO brought the ideal combination of operational and financial expertise. Key qualifications included:

• Sector Experience: Former Group CFO of a €150M automotive components supplier, with direct experience managing multi-plant European operations.
• Transformation Track Record: Led a finance transformation program that improved EBITDA margin by 6 points through procurement savings, working capital optimization, and supply chain renegotiations.
• Private Equity Expertise: Had previously partnered with a mid-market PE firm, supporting a successful exit to a strategic buyer after doubling EBITDA within four years.
• M&A Capability: Managed three bolt-on acquisitions, including post-merger financial integration and the rollout of a unified ERP platform.
• Leadership Impact: Built high-performing finance teams and implemented robust FP&A and BI systems, transforming finance into a proactive business partner.

Impact

Within the first 12 months, the new CFO drove measurable improvements:

• Investor-Grade Reporting: Introduced monthly board packs with full P&L, balance sheet, and cash flow transparency; implemented group-wide KPIs aligned with PE value-creation levers.
• Margin Improvement: Delivered single digit million in annual savings via procurement initiatives, operational efficiency programs, and pricing optimization.
• Working Capital Optimization: Reduced working capital by 12% through tighter receivables management and inventory controls, unlocking cash for growth projects.
• M&A Execution: Successfully executed the financial due diligence and integration of a bolt-on acquisition, increasing group revenue by 25%.
• Exit Readiness: Established a forward-looking financial model and long-term planning framework, positioning the business for a strategic exit within the targeted 4–6 year horizon.

Conclusion

This CFO appointment highlights the critical role of financial leadership in unlocking value creation within PE-backed manufacturing businesses. By aligning with the sponsor’s growth thesis and driving both financial discipline and strategic readiness, the new CFO transformed the finance function into a cornerstone of the company’s growth journey.

Today, the company operates with enhanced profitability, stronger cash flow discipline, and a clear roadmap toward a successful exit—demonstrating the power of appointing the right financial leader at a pivotal stage of transformation.