Corporate Finance

Finance Roundup for Executives

Be informed, get involved, and shape the world through finance.
Kerry MarunaMarch 16, 2016

Standout Stories

Post-merger integration… The list of high-profile mergers that have faltered or failed due to a clash of cultures is long. It’s a serious and common problem — and largely avoidable. When it comes to integration, as one of our clients likes to say, “culture trumps strategy.”

In our research we have found material cultural differences in every one of the mergers and acquisitions we’ve analyzed. That’s 100%. Yet, very few companies perform the same level of due diligence on corporate culture as they do on the more-tangible assets that need to be brought together during the post-merger integration: facilities and capabilities; talent; products in the R&D pipeline; customer, sales and market data; and finances. Read article.

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Metric of the month… It wasn’t so long ago that the term “finance” brought to mind large teams of accountants sitting at desks and slogging through spreadsheets day after day. Thank goodness for technological advances that made it possible for finance teams to do so much more in so much less time. Right?

Here’s the surprising truth: While much has changed in the last two decades, very little has changed at all for many companies in terms of the size of the finance function.

Out of 328 finance executives at large companies who completed APQC’s Open Standards Benchmarking assessment as of March 1, 2016, the best-performing 25% of companies spends 0.57% of revenue or less to run their finance operations, including the “biggie” functions such as accounts payable, accounts receivable, general accounting, and performance management. (See figure below.) Not bad at all, and certainly far better than the roughly 2% of revenue that even the most efficient organizations were spending on finance 20 years ago, according to the CFOarchives. Read article.

 

Headlines

 

MF Global Investors Settle Fraud Claims for $29M

The settlement with five financial institutions that underwrote the sale of MF Global bonds brings the total recovery for investors to about $234 million.

 

Avoid Culture Wars in Post-Merger Integrations

Culture is often one of the underlying reasons for the deal. Ignoring or changing that culture can destroy the target’s value.

 

Small Business CFOs Report Fewer Cyber Attacks

In the last 24 months, less than one fifth of small and midsize companies say they have experienced attacks on their computer networks, CFO finds.

 

Metric of the Month: Total Cost of the Finance Function

Very little has changed for many companies in terms of the size of the finance function.

 

Campari Buys Grand Marnier For About $759M

Gruppo Campari to pay a 60% premium to the target’s current share price.

 

U.S. Retail Sales Fall in February

January retail sales were revised to a 0.4 drop from the previously reported 0.2% gain.

 

Microcap CEO Accused of Touting Bogus Deals

The CEO of RVPlus claimed that the company had, among other things, a 10-year, $1.8 billion agreement with the Nigerian government.

 

Bank Can’t Dodge Suit Over Mt. Gox Collapse

Mizuho Bank provided banking services for bitcoin exchange Mt. Gox and handled all deposits for U.S. customers.

 

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