Growth more often than not translates into value. This belief has generally held firm regardless of the winds of the market and economy. Accordingly, the marketplace for growth-related business transactions is increasingly dynamic, complex, and fraught with challenges. Institutional investment funds have experienced considerable returns in recent years, and their success has bred more institutional investment funds and a growing stockpile of capital. Companies—the beneficiaries as well as the competitors for the deployment of this capital—increasingly face growth pressures from the market and their shareholders, many of which are institutional investment funds. This cannibalistic cycle requires ever more sustenance and is the driving force behind rising valuations and riskier transactions.
Transaction risk can result in far more than financial troubles to management and the board of directors (BOD). Shareholder lawsuits and the advent of Sarbanes-Oxley (SOX) are the direct result of aggressive deal structuring, self-absorbed management, and transaction failures, and they represent the uglier side of the risks facing management and the BOD. To mitigate these threats, companies are looking to corporate governance as a saving grace. The development and implementation of strategies to govern decision making throughout the transaction process has become increasingly important as companies can no longer merely follow a hunch without exposing themselves to significant risk.
The chief financial officer (CFO) is at the focal point of these challenges as the financial decision maker and manager of the transaction process. More than ever, the CFO position is on the hot seat and yet its duties are only increasing. Consequently, transaction planning and support is more important and necessary than ever. This is an even more significant issue for smaller companies that do not employ a corporate development function, and thus, are particularly vulnerable in this area. Recognizing the challenges and corresponding needs presented by the market environment, Corporate Development Partners, LLC (CDP) was formed to serve as a resource to companies and their management who are in need of corporate development support and advice.