Mid-Market Exits and the High Stakes of Timing
In UK and European mid-market exits, timing is everything. Yet many private businesses delay hiring a CFO or Finance Director until a deal is on the horizon – a costly mistake. Today’s buyers, including PE firms and strategic acquirers, scrutinise financials with the rigour of public markets. That’s why many PE-backed firms appoint a CFO 12–18 months pre-exit. The right finance leader, hired early, often makes the difference between a smooth, successful sale and a missed opportunity.
The Strategic Role of a Senior Finance Leader
A strong CFO does far more than keep the books – they drive value creation and exit readiness. From day one, they align financials with strategy, deliver clear reporting, and translate numbers into insight. This sharpens decisions, builds confidence, and shapes a compelling equity story.
They also manage key external relationships, ensuring banks, investors, and acquirers receive consistent, credible updates. As one long-standing PE partner told Cedar: a strong CFO helps a business withstand diligence and maximise value. They bring clarity, control, and strategic edge when it matters most.
Financial Clarity, Compliance and Credibility
In fast-growing firms, financial reporting often trails best practice. A senior finance leader puts robust systems in place early, making financials audit-ready and instilling buyer confidence. Clean numbers suggest a well-run business; messy ones turn buyers away.
Compliance is just as critical. An experienced CFO ensures tax, regulatory, and accounting matters are watertight long before diligence begins. From revenue recognition to legal risks, they spot and solve issues early. Many deals collapse over compliance – strong finance leadership prevents late-stage surprises and protects credibility.
Due Diligence Readiness: No Surprises for Buyers
Due diligence can make or break an exit. Buyers scrutinise every detail. A seasoned CFO ensures the business is ready: building the data room, refining reporting, running quality-of-earnings reviews, and pre-empting issues through “soft diligence”.
The difference is stark. One mid-market firm entered talks with a buyer who requested the data room link – they didn’t have one. The deal collapsed. In contrast, well-prepared companies move confidently. Advisors recommend starting 12–18 months in advance – time a good CFO uses to clean up data, refine the story, and align operations to buyer expectations.
Hire too late, and key prep work gets rushed or missed. That slows progress and raises doubts. As one CFO said, the goal is to “minimise concerns and maximise value.” Being ready builds trust – and keeps deals on track.
Value Optimisation: CFOs as Deal Enhancers
A great CFO doesn’t just prepare for exit – they enhance it. Mid-market firms often leave value untapped. A sharp CFO identifies efficiency gaps, drives margin improvement, and unlocks growth. Every pound saved or earned can multiply when exit multiples are applied.
They also shape the equity story – from standardising KPIs to highlighting recurring revenue and segment margins, they know what drives buyer appetite. As one advisor put it, the goal is to create a clear, compelling narrative that fuels competitive bidding.
Delay the hire, and you delay this value creation. In 2024, a London firm entered a costly lease later unwound by a CFO, saving £8 million. Another missed millions due to billing errors caught only post-deal. Both hits to valuation could have been avoided.
In PE-backed firms, CFOs are viewed as EBITDA accelerators. Founder-led businesses should take the same view. A great CFO pays for themselves – in uplift created and value preserved.
Exit Timelines and Deal Momentum: How Delaying Hurts
Delaying a senior finance hire slows exits – and in M&A, speed matters. “Time kills deals.” Without a CFO driving preparation, the process drags, exposing the deal to buyer fatigue, market shifts, and missed opportunities. In the mid-market, where buyers juggle multiple targets, delays often mean lost momentum – and lost deals.
Prepared companies move quickly. In late 2024, a PE firm partnering with Cedar brought in an interim finance specialist six months before exit, freeing up the CFO to focus on the deal. The result: a smooth, on-time sale. Without that support, timelines would have slipped. The message is clear – exit readiness requires proper finance bandwidth.
Leave it too late, and you’re forced into rushed hires or expensive stopgaps. One CEO who waited paid £900k in audit fees – a cost an early CFO could have avoided.
Deal value can suffer too. Buyers price off EBITDA multiples assuming forecasts hold. If numbers slip or financials are messy, confidence drops – and so does valuation. Sellers may be forced to accept weaker terms. No founder wants to lose value over poor prep – especially when a timely CFO hire could have changed the outcome.
Summary: The Risks and Costs of Delaying a Senior Finance Hire
- Slower Timelines, Higher Risk
Without a CFO driving prep, deals stall. Delays increase the chance of market shifts or buyer hesitation. - Lower Valuations, Shaken Confidence
Missed forecasts and messy financials spook buyers. If the business isn’t exit-ready, offers drop – or disappear. - Emergency Fixes, Expensive Mistakes
Late hires mean last-minute fire drills. One CEO paid £900k in audit fees – a cost a CFO could have avoided. - Missed Moments
Some costs aren’t visible – like the exit that never happens. One CFO missed an unexpected acquisition offer simply because the business wasn’t ready.
Conclusion: Hire Early, Reap the Rewards
For mid-market leaders eyeing an exit, the message is clear: don’t wait to hire a senior finance lead. The cost of delay far exceeds the salary of a strong CFO. Bring them in early and gain a partner who drives discipline, ensures compliance, builds value, and keeps diligence on track – all of which shorten timelines and lift valuations.
Delay, and you risk missed forecasts, buyer fatigue, and value erosion. Investors know this – which is why CFOs with deal experience are in high demand. Founders should see them not as a cost, but as a catalyst for a better deal.
Bottom line: waiting to hire your CFO is a risk you can’t afford. Plan ahead – and position your business for the exit it deserves.
At Cedar Private Equity, we partner with high-growth and PE-backed businesses to secure proven CFOs and senior finance leaders who drive value from day one. Whether you’re preparing for diligence or shaping your equity story, we’ll help you make the right hire – at the right time.
Ready to strengthen your finance function ahead of exit? Get in touch with our team today.
