September 29, 2022

Anup Singh on how to think about IPOs and M&As during a downturn


IIllumio’s CFO Anup Singh chats with Alex Song on the podcast this week about strategies for finance leaders to manage their business efficiently during market volatility, IPOs, and M&As.

His insights come from the leadership positions he’s held at a wide range of companies, including Anaplan, Nimble Storage, Clearwell Systems, and Warranty Corporation of America. Notably, Anup led the $410m sale of Clearwell Systems to Symantec and the $1.4bn Acuity sale of Nimble Storage to HP.

Key takeaways

  • Ensure you have liquidity: three to four years of cash on your balance sheet. With this buffer, there should be an opportunity to innovate on and expand your business during challenging times.

    “Depending on the depth and duration of that recession, it impacts everybody because you will hear that deals take longer to close, or maybe they're slipping from one quarter to another. The customers that we have obviously are very cautious regarding the money they have to spend, the budgets, and so forth. And so we are very careful in terms of the metrics”
  • Regardless of the economic environment, a CFO should support the business, control the financial model, automate processes, and build a scalable business infrastructure and a world-class team.
  • Before an IPO, have scalable processes inside your business, a great set of advisors to help you on the journey, and clean audits and financials. Do your homework, learn about the process, hire people with IPO experience, and understand how to forecast effectively.

    “The IPO is a transaction. It is just a milestone along the journey of growing and building a business, which is the most important thing. I guess employees and executives should consider that, sure, you go to bed the night before the IPO, but as a private company, you wake up the next day, and you become a public company, and you're trading your stock every day. But that's when the hard work really starts”
  • Facilitating an M&A process starts by managing best-in-class financial operations and ensuring that your audits build confidence for the acquirer and reduce risk from the process. Emphasize your competitive advantage and leverage this during negotiations.

    “You should never try to build and manage a company for sale. Ideally, your company should be acquired. It shouldn't be sold. And there's a distinctive difference between these two. You can smoothen that process by managing best-in-class operations, just having a clean house and clean shop, and ensuring that your audits are clean too”

Learn more about Anup:

Check out the full transcript here.

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