David Marberger, CFO of Godiva Chocolatier, Honored at CFO Studio Reception


September 24, 2014

Lorenz Capalad
(732) 868-0000 x118

SOMERSET, NJ – On September 23rd 2014, David Marberger, CFO of Godiva Chocolatier was honored at the CFO Studio reception celebrating the launch of the Third Quarter magazine. The event was attended by nearly 150 of the area’s prominent finance executives and was held at Metlife Stadium. The evening was hosted by Real Estate Strategies Corporation and sponsored by Deloitte, JP Morgan Chase, Revelwood and Robert Half International.

Marberger, who discusses his role in helping to establish Godiva as a truly global brand in the most recent issue of CFO Studio magazine, addressed the audience with a more intimate talk. He spoke about his personal philosophies for success. He passionately advised against becoming a victim and to instead find solutions to setbacks. He stressed the importance of having empathy in your personal and work lives. He emphasized that empathy does not mean being weak, but by putting yourself in other people’s shoes, you can make better decisions. Finally, he encouraged attendees to stretch themselves by daring to be something they never thought they could be.

The next CFO Studio event will be an Executive Dinner Series meeting will be held on October 15th, 2014. Claude Draillard, VP Finance of Dassault Falcon Jet will lead a discussion on “Global Sales and Supply Chain Optimization…The CFO as Chief Inspiration Officer.” To request an invitation, please contact Lorenz.Capalad@CFOstudio.com or phone: 732-868-0000 x118.

About CFO Studio
CFO Studio and CFO Studio Magazine deploy the best of new and traditional media to promote finance executives as business and strategy thought-leaders. Andrew Zezas is the host of CFO Studio and the Publisher of CFO Studio Magazine.

Visit www.CFOstudio.com to watch interviews with New Jersey area CFOs, with new releases every Thursday morning at 10:00 AM EST!

To read stories that have appeared in CFO Studio Magazine, or for subscriptions and advertising opportunities, visit www.CFOstudio.com.

Funding for CFO Studio and CFO Studio magazine is provided by Real Estate Strategies Corporation and select advertisers.

Real Estate Strategies Corporation provides corporate real estate advisory and transaction services to CFOs, General Counsels, Management, and corporate Boards in New Jersey and around North America.


Flying High


Claude Draillard, CFO of Dassault Falcon Jet, is taking his organization to greater heights through collaboration and unmatched customer service.

By Alex Palmer

“What’s cooler than the best business jet?” asks Claude Draillard, chief financial officer of Dassault Falcon Jet Corp., laying out the case for why he loves his job. “It is a mix of technology, effectiveness, and luxury. We provide to our customers a working tool that gets them nearer to where they need to be than any airline can, in a highly customized environment that provides all necessary [technology], entertainment, and privacy.”

As CFO, Draillard is responsible for making sure the Company, whose impressive U.S. headquarters located in Little Ferry, NJ, overlooking the Teterboro Airport, provides its customers with transportation that is world-class in every sense — range, avionics, fuel efficiency, comfort, design — for the years or decades they own a Falcon Jet. That means combining superb resources with the organization’s strategy to provide highly sophisticated machines with tailored interiors, and cutting-edge technology that will exceed the expectations of the most demanding customers.

Or as Draillard puts it, “when a famous movie director and producer chooses a Falcon 7X to support his operations, it is because we aligned the best engineering with the best interior to provide a superior and economically viable solution to his long-range transportation needs.”

A Long-Cycle Industry

Ensuring that Dassault Falcon Jet satisfies exceptionally demanding high-level customers requires keen decision-making skills and deep understanding of the organization’s myriad components. And because business aviation is a long-cycle industry, the leadership at Dassault Falcon Jet must look far into the future, in addition to focusing on immediate concerns when considering the Company’s financial situation.

“[You have to] keep looking at the big picture and what you want it to look like in three, five, 10 years from today, while tending to every day’s affairs,” says Draillard. “You keep an eye on your order bookwhile wondering how come the catering for a demo flight in China is so expensive.”

It takes about 30 to 36 months to manufacture a jet, depending on the level of customization the customer requests, but the lifespan of a Dassault aircraft is 30 years or more. Over that time, it may have three or four owners, and each of those owners will have specific expectations and unique service requirements. In addition, buyers carefully consider resale value. Result: No design decision can be made without taking a long view of its impact on current customers, prospective future owners, and the place, itself.

Collaboration Key

Dassault workers take great pride in the fact that the business jets are designed by the same engineering team that designs Dassault fighter jets. Moreover, at every level of the Company, Draillard says, “there is a mindset that what we do [in the] short term influences what we do long term.”

On a recent morning, he went to Daussault Falcon Jet’s Delaware service center and spoke with the supervisor on the shop floor. The CFO asked, “What is the most important thing you do?” The supervisor, overseeing the servicing of the Company’s jets answered: “We help you sell this aircraft.”

Draillard emphasizes that workforce collaboration is vital. He learned this early on when he joined Dassault Falcon Jet’s parent company, St. Cloud, France-based Dassault Aviation, in 1994 as part of the Company’s Methods and Projects division (he had spent a few years in an accounting firm, of which he says “I loved my job, I loved my clients, but I didn’t like the [accounting] firm at all”).

In this first job at Dassault, Draillard was the go-between for the IT and finance sides of the Company. “I was really trying to make IT people understand what the requirements are from accounting,” says Draillard.

He climbed the ladder of Dassault Aviation’s finance department before moving across the Atlantic to Dassault Falcon Jet in October 2005 as manager, then director, of financial reporting. In February 2009 he stepped up to vice president of finance and CFO. Dassault Aviation (the parent company) is owned 51 percent by the Dassault family, 46 percent by Airbus Group; the remaining 3 percent is listed on the Paris Stock Exchange. In 2013, the total sales for the Dassault Aviation Group was €4.6 billion, of which 70 percent was Falcon.

In two decades, technology has changed greatly, but “the way you interact with IT hasn’t changed that much,” says Draillard. Now, as when he first began, success comes when someone within the finance department takes ownership of the lines of communication between finance and IT. “If you’ve got that person on your team, that’s great leverage to make the finance [arm of the Company] more up-to-date, competitive, and eager to serve the rest of the organization, and its customers,” says Draillard.

Today, he points out, the emphasis has shifted away from getting internal users to adopt the latest technology and toward ensuring they are using that technology as efficiently as possible — taking away repetitive tasks and making sure the data being produced is of the highest quality.

“The improvement in the finance team’s performance over the last 10 years was greatly related to steps taken in IT,” says Draillard, pointing specifically at the Company’s electronic data interchange (EDI), allowing greater integration between functions.

Internal and External

While much of Draillard’s work involves helping to create a lean and financially effective company, he also must consider points such as pricing strategy, customer financing options, and purchasing terms — all filtered through the lens of the Company’s position as a luxury brand.

“You’re talking to a customer who is paying anywhere between $26 and $52 million for an aircraft,” he says. “So it might be an individual who makes the decision himself, or it might be a head of purchasing at a company with a very structured acquisition process where you will seldom deal with the CEO.”

The type of purchaser has not radically changed in Draillard’s years at Dassault. But buyers’ geographical demographics have, as Asia has become a bigger customer for the Company’s aircraft. Another change: While decades ago, the typical buyer was often a pilot himself and wanted to spend his time in the cockpit, these sorts of customers are getting older, with many hanging up their pilot’s caps. The younger generation is less likely to be as interested in doing any flying themselves.

“Their requests are different — they want to know if they have Wi-Fi onboard, if they can use their iPad to control the temperature,” says Draillard. “There has been a significant shift from ‘this is the fun of flying’ to ‘this is my second home or place of business and I want all the conveniences.’ Like you or I would, they want to entertain themselves and also work, just like they do at home.”

Intelligent Acquisition Strategy


Top finance executives share insights on making acquisitions work.

By Daria Meoli

From 20,000 feet, a successful acquisition is a deal that makes you more money than you spent. But on a closer look, the process of maximizing the value of the acquired company often lies in a smooth and productive transition.

At a recent CFO Studio Executive Dinner, finance executives shared lessons learned from acquisitions they’d been involved in, and the conversation inevitably kept returning to the issue of transitioning employees and knowledge transfer.

The event, sponsored by KPMG and hosted by Real Estate Strategies Corporation was moderated by Glenn Sblendorio, president and CFO of The Medicines Company.

Since 1996, The Medicines Company has completed more than 20 acquisition deals, and Sblendorio provided a wealth of insights to the group.

The Medicines Company’s first acquisitions were drugs used in hospital cardiac catheterization labs. The company worked to establish cardiac cath labs as the business’ core of expertise. From there, the company created a map of hospital functions around the cath lab and identified targets for acquisition around drugs appropriate to the labs’ functions. The Medicines Company effectively created an acquisition strategy based on a patient’s typical treatment route.

The Human Component

“Some of the toughest issues we’ve faced in any of our acquisitions have been the people issues,” said Sblendorio. “Deciding who you want to take in an acquisition and for how long — 9 months, 12 months, 16 months in certain cases — is difficult. When you do take folks from the company you acquire, it can be very costly to integrate them.”

The group discussed two human capital issues at length: knowledge transfer and company culture clashes.

Participants were divided on how to keep the employees of the acquired company engaged in knowledge transfer when they know their time with the company is limited. Sblendorio has dealt with these issues in several different ways.

The first example Sblendorio gave was to incentivize employees who work with customers or who hold positions for which the knowledge can be transferred relatively easily. At The Medicines Company, leaders did three things: determined the employees who would stay three months with pay, protected the employees’ pensions, and paid their bonuses. “To keep people for any longer than that three-to-six months, you’ve got to offer a really big check,” said Sblendorio. “Even then, people start to worry and look to get something new, so you have to have a definitive plan for every employee before implementing the transition.”

Culture clashes are a common impediment to the transfer process. “Another acquisition we did was for knowledge,” said Sblendorio. “We embraced these folks. We upped their compensation and their options. We spent a lot of time with the leaders of [the acquired] company to get them to embrace our culture. The people stayed because they had big paydays coming, but we were unable to really transition in terms of truly integrating the business and the culture. As a result, we were held hostage by the agreement because there wasn’t an adequate amount of transfer happening. They were held hostage because they weren’t going to leave until they got their big payday on their options.”

Mark Mishler, CFO, most recently at Breeze-Eastern Corporation, agreed. “The incentive plans work for the short term, but if the cultures are completely different, as soon as those incentives expire, employees are out the door,” he said. “If it’s not a fit, they’re going to get what they can out of it and move. And who can blame them?”

Another suggestion made was to document as much knowledge as possible. “Military people call it a ‘turnover folder,’” said Cheryl Marks Young, CFO of Easter Seals of New Jersey. “It’s not just asking someone what they do for a living. It is about putting all of a person’s expertise in a package and documenting what that person does day-to-day on the job. When you do a merger or acquisition, those packages get forwarded.”

Other participants discussed the value of keeping employees onboard permanently. “I’ve been involved in acquisitions where we learned the hard way that time alone isn’t enough to ensure a successful transfer,” said Eileen Black, controller at Stevens Institute of Technology. “If you grab a couple of the key people and make them part of your long-range plan, you can continue to pull the information out of them. Sometimes there’s hidden knowledge. There’s knowledge that’s not documented and that hidden knowledge can be the difference between making a product successful or not.”

Tim Anglim, president of YesCFO, agreed. “There is a lot to be said for getting the right people to stay. It’s not just about the money, they have to feel like they’re part of it.”

Lisa VanPatten, CFO of Kitara Media, expressed concern about helping employees from the acquired company to become engaged with the acquiror’s mission. “It’s so important to communicate that there is a light at the end of the tunnel,” she said. “Let people know what they are working to build and give them a vision. That is especially important when you are working with a startup culture. The reason many of these people are there is because they love that startup feeling and there isn’t a lot of red tape. You have to be concerned that your procedures and processes might change their excitement for innovation.”

“That’s the nature of evolution and growth,” said Andrew Zezas, publisher of CFO Studio magazine and CEO of Real Estate Strategies Corporation, and the evening’s host. “You go from being a family to being a corporation, and some people long for that small, intimate, and friendly culture.”

Sblendorio brought up the Roche acquisition of Genentech in 2009 as an example of how the integration of a startup into a behemoth can work. Leadership at Roche kept their distance. In fact, they did not approve any travel of executives from New Jersey to San Francisco, where Genentech was based. “Roche kept Genentech’s DNA of innovation pure,” said Sblendorio. “Roche did not want to choke their culture.”

The participants also discussed integration from an operational standpoint. “While the human element is key to the success in any acquisition, system integration also plays a very important role,” said Alnert B. Caamic, CFO and treasurer of Mitsui Foods, Inc. “Many system-related questions need to be addressed. How can the recently formed alliance provide its reporting? Will the existing reports satisfy the needs of the parent company? Can the system of the newly acquired company seamlessly flow into the parent company? Will the new company’s personnel be trained in the parent’s system? I give a lot of credit to the management of The Medicines Company. The amount of acquisition they have done within the last several years is outstanding; acquisition is not an easy task, making it successful is enviable.

Before the Deal

According to Sblendorio, the key to successful knowledge and operations transfer is to head off problems during due diligence. “We’re not just assessing the opportunity from a financial point of view; we’re looking at the operational opportunity as well,” said Sblendorio. “We may have 20 to 30 people working on due diligence. Usually one or two of our business development people will join that company as part of the transition.”

Howard Reba, now with Marlin Equity Partners, reiterated the criticality of planning for the integration of the companies at the earliest stages of the M&A process. “Failure to address sacred cows and consider all the implications of the merger at the outset can lead to a huge waste of time and transaction costs, or worse yet, a failed deal.”

Ed Schultz, principal of The Highland Group, expanded on the idea of investigating operations. “On the business integration team, you need to put together functional maestros from both the buy and sell sides who will remain with the company,” he said.

As VP, Corporate Controller and Chief Accounting Officer of Quest Diagnostics, Tom Bongiorno has supported many acquisitions. “We’ve had a very similar approach to our due diligence,” he said. “We leverage our functional subject matter experts from Quest Diagnostics as members of our due diligence team. That’s been really exciting for Quest because many employees have been able to be part of our business development efforts. For example, if you’re the head of lab operations in a region, you’ll be leading lab operations for the diligence team and step away from your day-to-day job to get involved with business development and eventually with integration efforts. That has worked very effectively at Quest Diagnostics. . Leveraging our functional subject matter experts on diligence teams has allowed us to maintain a smaller, more efficient full-time professional business development team.”

Michael VanPatten, CFO of Smart Center previously led an acquisition of a public company by another public company. Due to the Hart Scott Rodino regulations, it took the Security and Exchange Commission nearly four months to approve the deal. But VanPatten and his executive team took that opportunity to get to know the target company. “We signed a contract with them and sent in a management team to run the business for three or four months,” he said. “It was awesome because it was during that time that we got to choose people we wanted to keep. We also used that time to integrate our teams and processes as well. It was like getting engaged before you get married. It was a really great acquisition for us.”

Post-Acquisition Results

John Breeman, CFO at Voltari, spoke about the role of the sponsoring manager in making sure the transition goes smoothly. “When a deal was approved by the board, the sponsor of that deal was given 24 months to integrate the business,” said Breeman. “After that 24-month period, the business would be subject to an internal audit and the managing sponsor would have to present the results to the board. These managers knew from day one how their plan was going to be measured and that was effective in getting results.”

Bill Korn, CFO at MTBC, says his company targets businesses for acquisition that do not have their own technology. “I’m acquiring companies for their customers. We are about to triple in size by buying three more companies in the same day, which for us is less expensive than hiring a sales team and spending months courting individual customers.” he said. “We’ve said we’re not going to buy anybody that has developed their own technology. We’re not going to worry about integrating the technology. The notion here is we’ve got technology, we’ve got an off-shore team that’s very cost-effective and what we’re really doing is we’re buying scale that is cheaper than it would be through conventional sales and marketing efforts.”

If Korn’s company is acquiring for the purpose of growing sales, what if customers leave after the deal is done? “Part of each purchase agreement is a true-up which states that any customer I lose in the first year, I don’t pay for,” he said. “That means the seller has got to be involved until our people are up and running. It’s in their best interest to convince the customer they are better off with us and promote a smooth transition.”

The Speed of the Deal

The group also discussed competition for acquisition. Sblendorio said that the advantage The Medicines Company has for winning deals is speed.

Marks Young recalled when she worked at Viacom, years before Sarbanes-Oxley, getting board approval on mergers and acquisitions was comparatively simple. Today, that process has become more of a challenge.

By keeping his board well-informed and creating access to capital, Sblendorio’s business is able to act fast on opportunities. “I talked to the VC community and I talked to the investment banking community,” he said. “Our approach was to hang a sign out on the front door that said we’re looking [to acquire businesses]. It took a couple of investment conferences and it took some time to get our strategy known. After a few years, they all understood what we were doing. Over time, the balance sheet became stronger. That was another key part of this. We advertised that balance sheet, so we were able to raise some cash as well.”

The M&A Climate

Before dessert, the dinner guests discussed the economic climate for mergers and acquisitions. Tom Angell, partner at Rothstein Kass said, “We’re seeing a lot of action across industries. There has been a lot of cash sitting on the sidelines for a long time, and with the market starting to go up, a lot of people are doing deals. Banks are opening up a little bit so we have seen a lot of action in a lot of different areas.”

Breeman noted that funding for startups is beginning to increase. “You didn’t have a lot of startup funds over the last three or four years, and that’s starting to change. People are putting money to work again.”

The consensus was that in today’s market, anybody can sell a company. The issue is whether or not they get a good price.

Copyright 2017