The ZRG Team Took the Divested Entity to the Finish Line, As A Private Equity Portfolio Company

At A Glance

Company Type: Enterprise, public

Industry: Software

Solution Area: Strategic Advisory Services, Transition Solutions

About The Client

A Silicon Valley giant in the security software space divested one of their divisions to a private equity–backed company.

Challenge

The company was selling a line of business for hundreds of millions of dollars to a private equity–backed company that lacked the capability to take over the accounting right away.

The divested business had never been segregated, and its global revenue was 400% of the acquiring company’s revenue, making the responsibility a complex one.  

Plus, unlike the U.S.-centric buyer, this business had international operations and disparate systems.

As part of the sale, the security software company signed a transitional services agreement (TSA), agreeing to provide transitional accounting services for up to 18 months after the deal closed.

But they lacked the internal bandwidth to provide the services on their own. The work needed to be done quickly—the team had just 12 weeks to get up to speed and segregate the accounting records—all while the TSA was in negotiations.

Solution

ZRG provided leadership and built a dedicated and deeply experienced team to implement the work defined in the TSA.

• Segregate the accounting records and processes of the divested business to create stand-alone financial statements for the buyer where none had been previously created
• Set up systems and processes the divested business could run after the divestiture was complete
• Produce on-time financial closes for the newly segregated business

Results

• Smooth implementation of TSA services
• Early exit from the agreement
• Cost savings for buyer and seller
• Full support for the first financial statement audit

"ZRG managed to assemble a top-notch team in a short period and was prepared to begin the TSA accounting services right on schedule.

They worked well with our team to minimize the impact on their work while providing a high level of service to the acquiring company. We could not have carried out this TSA without them”.

- Senior Director, Finance

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