CFOs Urged to Understand What They’re Acquiring When Making the Deal, in Talk Co-Hosted by School and CFO Alliance
March 02, 2012
When considering acquisitions and mergers, CFOs often fail to take into account the culture, strategy and execution of the company they are looking at, all of which can play an integral role in the success, or failure of the deal. That was among the many observations made by George Pita (BBA ’83), the COO and CFO of Stuart Weitzman Holdings, during a discussion co-hosted by the School of Business and the South Florida Chapter of the CFO Alliance in February.
“You have to look past the numbers and understand what you’re acquiring,” said Pita, who urged CFOs to remember that it’s not always easy to walk away. “Sometimes the best deal you make is the one you don’t,” who also discussed his own company’s successful acquisition strategy and offered advice on how CFOs should move forward as they head out of the recession and into the future.
The discussion, “Consummating a Deal in Uncertain Times,” was moderated by DJ Nanda, a professor of accounting at the School, who agreed.
“Ninety-five percent of M&A deals is what you don’t see on financial statements,” said Nanda.
Public mergers have decreased from 1,184 in 2007 to just 725 in 2011, a grim figure for CFOs and financial executives. But according to Pita, it’s the nature of the business.
“It’s not a frothy market, but it’ll correct itself,” he said. In addition to letting the market adjust itself, there are proactive approaches CFOs can take to ensure successful acquisitions.
“Knowing when to back out is just as important as knowing when to buy in,” he said. “For a lot of people, the thrill is in the deal, but as CFO, you need to look past that.”
Getting creative is another approach CFOs can take to lead their company toward results. When facing a saturated market, CFOs should think of new products that can be offered and different markets that can be reached, Pita suggests. “Go where no one else is going.”
The partnership between the School of Business and the CFO Alliance has facilitated discussions and debates among CFOs in the area, helping them overcome the corporate challenges they face in today’s market. The CFO Alliance is a global community of financial leaders and experts who share their experience, knowledge, and wisdom to enable one another to act decisively and effectively. Through live in-person events, virtual interaction and a knowledge base that delivers relevant information and support, financial executives get the information and guidance they need to lead their organizations through times of challenge and transition, and to drive performance and results.
The next South Florida CFO Alliance Roundtable will be Wednesday, April 25, 2012.