From a £6.8m Exit to £14.1m - What a Fractional CFO Did in 11 Months
A Fractional CFO helped an aviation software business increase its exit value from £6.8m to £14.1m in just 11.5 months.
The owner of one of the most innovative software businesses in the aviation industry had already decided to sell. He had a valuation - £6.8m after debts, based on a 12x multiple, and was ready to move. What he didn't yet have was someone to help him make the most of the opportunity.
A Fractional CFO with a strong track record in exits and M&A was appointed. What followed was eleven months of focused preparation, and a result that significantly exceeded expectations.
The challenge
Yew Tree had built something genuinely valuable; the software sold well, the business was profitable, and more products were in development. But a good business and a well-prepared business are different things. The owner had a number, but there was more value to unlock before going to market.
The approach
A six-month improvement plan was put in place, covering everything that could reasonably be strengthened before a sale process began. Management were incentivised to perform, and operational/financial improvements were made across the business.
Working alongside a specialist boutique corporate finance firm, the Fractional CFO ran a focused exit process - identifying the right buyers and positioning the business to attract serious interest.
The outcome
- Business sold to a US competitor 11.5 months after engagement began
- Exit value: £14.1m - more than double the original £6.8m valuation
- Management incentivised and aligned through the process
- A clean exit was achieved through a dedicated M&A process
The impact
The owner had been prepared to walk away with £6.8m; and instead he walked away with £14.1m.
The difference wasn't luck - it was eleven months of targeted preparation, the right corporate finance partner, and a CFO who knew exactly what buyers look for.
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Frequently asked questions
Common questions about fractional services and how they work
What’s a CFO, and what do they do?
A Chief Financial Officer or a Financial Director (FD) is responsible for the entire financial function within a business or organisation. Often referred to as a CEO’s righthand man/woman, they are always looking into the future and driving the business forward.
What’s the benefit to a fractional CFO, and how do I know if I need a FT or PT one?
It is recognised that 99% of businesses in the UK with a turnover below £50m, do not require a full-time Finance Director to achieve their strategic goals. Often full time CFO’s within these businesses find themselves doing non-CFO work (finance control work, IT, HR). This is hugely costly to the business. A fractional CFO allows a business or organisation maximum benefits to a business without the costs of a full time CFO. It’s a very cost-efficient way of accessing a superstar CFO without the full time cost. The savings to a business can be enormous (>£100k pa) If you think hiring a superstar fraction CFO is expensive, try hiring an average full time and seeing the value difference…
What’s the difference between a fractional, part-time CFO, interim, external, outsourced FD?
They’re all the same!
When should a company hire a fractional CFO? How do I know if we’re ready?
As soon as possible! We help businesses at all stages, whether that’s a pre-revenue startup, rapid growth, scaling up, cash-flow issues, to successful exit. We have highly successful CFO’s who have stellar backgrounds at all these stages waiting to help.
Can they help raise significant funding and or investment for the business?
Yes, they have a unique approach around building a proposition for a funder and taking the funding project right through to conclusion.
Can a fractional CFO help with scaling?
Yes, they will be advising on every element of the business that can be strengthened to grow the business.
Can a fractional CFO help with exiting/sale?
Yes, typically a CFO will stay with the business right through the whole process, concluding when the money is in the back. To ensure continuity they can also stay on under the new ownership.
Will the CFO’s be qualified?
Yes.
Do they work remotely or in our offices?
They can be flexible as to your needs, working either in the offices or at home or a combination of both.
Do they typically attend board meetings?
Yes, they usually attend, and quite often chair or lead the meeting.
Can a CFO help bring AI automation into the finance team/throughout the business?
Yes, our leaders will be working to ensure the most efficient technology systems are running throughout the business.
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