Case Studies

Success Case Study

Client Client Mexican mid-size enterprise. Privately held. $20M USD annual revenues.
Context Context Our client was looking into different strategic alternatives to ensure growth in the mid-term, including M&A, joint ventures, and international expansion. At the same time, there were several challenges related to the integration of new technologies into their service offer and, in general, understanding and guiding the digital transformation of their business.
Our Intervention Our Intervention We proposed the creation of a formal business advisory board to support the owners in the strategic decisions of their business. The board was integrated by eight people. Three of the eight were consultants from our firm, the other three were company partners, and we supported the recruitment of other two board members with specific knowledge of digital technologies. We established the agenda for the meetings, acted as facilitators and deployed several strategic planning tools in order to help define a vision and a list of priorities. We provided expert input into several of the discussions, gave feedback to the partners, and pushed the process forward.
Result Results The business advisory board was key to exploring new concepts and ideas. It helped the owners to put their thoughts and priorities in order, to determine the set of strategies that better fit their overall vision, and to be more confident and decisive in their decision making process. Once priorities and initiatives were identified, the board supervised and supported their proper execution.
Client Client U.S. Multinational. Leader in the global advertising industry. Fortune 500.
Context Context Our client had acquired a large operation in Mexico. We were hired to review specific items that were the subject of a controversy between the acquirer and the target company. These items had a direct impact on the earn-out calculations that affected the purchase price of the transaction. Many  of the items were subject to interpretation, which created discrepancies and conflict among the parties involved.
Our Intervention Our Intervention Our intervention was directed into providing an independent opinion on the conflicting items that were affecting EBITDA. This required the performance of certain audit procedures to ensure that the accounting procedures were acceptable, as well as performing an assessment of the internal control environment. In a second stage, we provided an independent and objective point of view on the controversial items, moving the discussion into a more technical base and removing the individual interpretations. Finally, we also played a role of mediators, helping the parties to find common ground and giving alternatives that would help to find a solution that was fair to all parties.
Result Results Our audit was very well received. The report was used as a starting point in the negotiations. We played an active role in facilitating the technical background behind each one of the points, and provided an independent voice that helped reach a final solution.
ClientClientU.S.-based multinational, member of the Fortune 100, large player in the financial services industry, with long-term presence in Mexico.
ContextContextThe CFO of the Company required a consultant that could play the role of a hands-on trusted business advisor and take care of special projects and initiatives that could not be handled by the regular Finance staff, whether because of the confidential nature of the task, or because of the level of specialization and experience required, or simply not to take focus away from the day to day operations.
Our InterventionOur InterventionAfter several discussions with the CFO, we provided three of our best Finance consultants for interview in order to select the one that was considered best fit. We provided internal training to our consultant in order to get him up to speed on certain particularities of the industry, and also organized a half-day introductory session with the client for that same purpose. In less than two weeks from our first conversation, our consultant was up-and-running and supporting the CFO on the tasks required.
ResultResultsOur consultant became an integral part of the Finance team, helping the CFO to progress more quickly on special projects without having to divert much time from the people in charge of daily operations. Our consultant has been with the Client for six years, and in that time has played many different roles, from back fill to the CFO during holidays or sick time, to immediate replacement of a key manager that left suddenly, to Lead Project Manager of a complex Peoplesoft implementation. Our consultant today is a resource that can be deployed with full flexibility to resolve special tasks and projects.
Client Client U.S. multinational, Fortune 100, leader in the global telecommunications market, having recently acquired a significant new operation in Mexico.
Context Context After the acquisition, certain allegations were made to the new management in charge of local operations. Allegations were focused on mainly three areas: Special un-authorized deals with certain vendors, significant personal expenses charged to the company by certain executives, and irregular accounting treatment of certain items to artifically increase proftiability. The company decided to engage us in order to perform and independent investigation into the allegations and develop a response plan.
Our Intervention Our Intervention A team of two consultants was deployed in the local operation for a period of eight weeks. Their involvement was communicated as support for the post-acquisition efforts. In-depth confidential interviews were performed with more than 50 company employees, which allowed us to capture highly valuable information. Additionally, the consultants performed a special review of company expenses, T&E reimbursements, and accounting treatment of certain suspicious items.
Result Results Our involvement resulted in a detailed report with findings and with suggested recommendations. We provided a map of company executives with the results of our in-depth interviews, as well as verification of certain local records (employement history, legal and commercial databases, property records, etc). We provided certain conclusions based on our professional independent assessment, and we stayed for another six months supporting the new management in the implementation of our recommendations and the overall integration of the new business.
ClientClientMexican mid-size private company. Financial arm of a large automobile and truck distributor in Central Mexico.
ContextContext

The owners of this automobile distribution network had grown their business successfully throughout the years. They have entered the automobile financing business in 2008. Although the financial operation had been successful, the owners wanted to grow to the next level but without having to depend exclusively on their own capital. 

Our InterventionOur Intervention

After several sessions with the owners and their executive team, it was decided that the best option was to pursue a debt placement in the local financial market of $300 Million MXN. We were engaged by the company to help in three aspects:

1.Work with the Management Team in the preparation of the Company for such debt issuance in public markets. This required to strengthen the Company’s Corporate Governance, ensure the internal control environment was adequate, and improve certain specific KPI’s.

2.Support the Company in the identification of possible financial partners to work on the issuance, help to prepare all the necessary financial information, and negotiate the best possible terms and conditions.

3.Act as Project Managers for the whole process, reporting to the board of directors, and ensuring the issuance proceeds were used to fund new credit loans of good quality.

ResultResults

The Company was able to raise the expected $300M MXN. It developed great relationship with a few additional financial companies in Mexico, grew its credit portfolio by 80%, and continues to profitably contribute to the overall success of the group.

ClientClient

Mexican public company, leader in the financial services sector, with operations across the country.

ContextContext

The CFO of this company wanted to have an independent assessment of their overall tax compliance process. The objective was to properly prepare for the year-end audit, and to proactively identify tax exposures that would require the recording of an accounting provision.

Our InterventionOur Intervention

We worked with the tax department on a specific audit program. Top of the list was to perform an independent review of CFDIs issued versus Data in Trial Balance and in Monthly Tax Filings. This review identified certain discrepancies originating in operational processes as well as with the PAC (Authorized Service Provider). We also reviewed the annual income tax filing for the past and current year.

ResultResults

We recalculated the monthly tax filings and annual income tax filings for the past two years. Our independent recalculation identified a couple of important issues that required to be fixed. We also proposed an accounting provision to sufficiently cover the identified tax exposures. Finally, we issued a letter of recommendations to address the operational processes that were negatively affecting their CFDI issuance process.

ClientClient

European private multinational, with operations in more than 60 countries, and strong presence in Latin America.

ContextContext

The Company had a subsidiary in South America that had been in trouble for a few years: Lost clients, decreasing revenue, low profitability, low employee morale. The Company had two Country Managers in the past two fiscal years that made some progress but were not capable of completing a full turnaround.

Our InterventionOur Intervention

We provided an Interim Country Manager supported by other members of our firm to drive the turnaround effort more efficiently. Our Interim Country Manager focused on client and employee issues, while another member of our team provided oversight on all accounting, finance and tax aspects. A turnaround plan was agreed with Corporate Management and we were in charge of the local execution.

ResultResults

The Company benefited from our independent point of view. We were able to identify problems with systems, processes and people, as well as inadequate practices that have been in place over the years (unathorized discounts, unauthorized deals with vendors, poor inventory management). After one year of work, the turnaround of the Company was completed.

ClientClient

European multinational, leader in the telecommunications industry, with global operations related to licensing of proprietary technologies.

ContextContext

The internal audit department of this Company has an aggressive annual plan that covers more than 100 offices in 64 different geographies. The Company has established a co-sourcing strategy in order to optimize the use of resources and to be able to deliver the audit plan on time, without having to increase permanent headcount.

Our InterventionOur Intervention

We work with the internal audit director in order to provide additional bandwidth to their internal teams, particularly as it relates to the delivery of audits in the Americas (USA, Mexico, Central and South America). Typically, we send one or two of our consultants to integrate with the auditors that are deployed in the region. Our resources provide excellent expertise and knowledge of the local tax and legal environment. When the audits take place in Mexico, our teams can take care of the whole audit process end to end.

ResultResults

The combination of internal and external resources has proven to be very successful. Our consultants have Big Four experience, taking part of complex audit projects in Mexico and other parts of the world. They can challenge the assumptions made by the Company, and provide best practices from other clients facing similar situations. The Company has been able to reduce their permanent headcount, optimize the use of their audit budget, and provide better risk coverage across the organization.

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