• Survey by Accordion found mismatch in expectations around exit planning
• CFOs often prioritize annual targets, while sponsors prefer long-term equity value focus

Private equity investors want portfolio company CFOs to be more proactive about exit planning amid ongoing challenges for M&A, according to consulting firm Accordion.

After a strong start to the year, market jitters over tariffs and a persistent bid-ask spread on valuations have caused many exits to be delayed. According to Mergermarket data, sponsor-led exits in North America declined 12% quarter-on-quarter in 2Q25 to USD 92.4bn.

However, many companies simply aren’t prepared to exit when the time comes, Accordion found in a recent survey. As many as 98% of sponsor respondents said they want CFOs to operate as if their company is always for sale. In contrast, only 20% of CFOs said they work with this mindset.

Bridging this expectation gap is all the more critical given private equity’s ongoing liquidity crunch, Nick Leopard, Accordion’s CEO, told Mergermarket. Preparation is key – with some companies putting the pieces in place 18 months prior to launching sale processes.

“Being exit-ready includes having your data foundation in place so that when you go to market and there’s a tidal wave of questions from potential investors, you can easily answer them and craft a story around value creation,” he said.

Value creation efforts can be hindered by a lack of alignment on timelines and goals. For example, the survey found that CFOs typically focus on meeting annual targets, whereas most private equity backers would prefer that they concentrate on building long-term equity value.

Moreover, the operating levers used to achieve this have changed. Investors can no longer rely on aggressive add-on strategies underpinned by cheap debt and multiple expansion. They must demonstrate the virtues of scale through proper integration of each acquired business and realizing operational synergies.

“Larger companies tend to have well-articulated value creation plans – how to scale from USD 2bn to USD 4bn, for example,” Leopard said. “But smaller firms are now catching up by documenting these plans, targeting quick wins like automation or platform integration to boost value within 12 months before an exit.”

Examples include mid-market healthcare businesses focusing on revenue cycle management to free up cash and improve profitability. In other instances, companies are cleaning up legacy systems, integrating past acquisitions, aligning payroll and rationalizing their technology stacks.

While some initiatives are highly sophisticated, concentrating on the fundamentals is key. “These aren’t always in place – basic things like implementing technology, closing books on time, and producing a solid monthly operating report,” Leopard added.

Exit planning is also complicated by macroeconomic uncertainty, which means extra work must be done to convince potential buyers that businesses are resilient. This ranges from mapping out different performance scenarios based on tariff shifts to prioritizing cash-flow management.

“Companies are dusting off their 2020 liquidity playbooks and revisiting best practices for cash flow and working capital discipline,” Leopard said.

New York City-headquartered Accordion is itself private equity-backed. Charlesbank Capital Partners and Motive Partners took a majority stake in the firm in September 2022.