Key Financial Priorities for Buyers: Q&A with Volaris CFO
As CFO, Brian Beattie supports capital deployment and ensures Volaris maintains the financial stability needed to support portfolio companies’ sustainable growth
AS Chief Financial Officer of Volaris Group, Brian Beattie has helped lead the expansion of our high-growth organization into new verticals and countries. He joined Constellation Software in 2005, initially as the CFO of sister operating group Perseus, before joining Volaris. Brian is a Chartered Accountant who brings more than 30 years of finance experience from past roles encompassing strategy, planning, acquisitions, and operational support. Brian’s past experiences include roles at KPMG, a large Canadian telecom provider, and at several tech start-ups and software companies. Brian supports the technology community through his service as a board and advisory member for several public and private companies.
In addition to overseeing the financial health of the company, he oversees the corporate functions including legal, tax, audit, IT, and corporate finance. Brian’s time is largely spent on supporting capital deployment and allocation at Volaris. Brian is an expert on every stage of the M&A process – from sourcing possible deals, to leading diligence, to executing the sales purchase agreement.
How do you see your role as a people leader within Volaris?
My role is to provide clear direction and to support our employees, who we trust implicitly. As a leader, I try to stay out of their way and not micromanage. I look to knock down hurdles that could get in their way of being successful.
Just as Volaris CEO Mark Miller has done in his role, I've been able to build out the CFO role over time. This has involved building out competencies as we grow and scale. The most important element is in bringing in strong people that fit culturally. When I started, I was much more hands-on and involved in everything. I also didn't have the strong functional leadership as I do now. Surrounding myself with strong leaders was required for us to grow as quickly as we do. Having the trust and confidence in my leadership team has also allowed me to step back and assess ways where I should go deeper in an area to add value.
What can someone learn about finance after joining Volaris, specifically the Volaris philosophy on risk management and capital allocation?
Risk management and capital allocation are two key parts of my role. I’ll give you a flavor of the risk management component: We are part of a public company, with a presence in multiple geographies, many of which have different business models. We’re also decentralized, since we believe in business autonomy, and complete many new acquisitions each year. All of this presents multiple types of risk which we need to understand, assess, and address. So for example, we stay on top of risks around accounting policies, risks associated with integration, and data security risk. Considering our belief in decentralization and autonomy, we do take a “trust and verify” role at the corporate level.
Capital allocation is also a key responsibility at Volaris. Growth is our raison d’être, and we accomplish a great part of it through acquisitions. As CFO, I am intimately aware of all our acquisitions and spend a lot of time examining how we deploy our operating cash flow and returns on invested capital. In short, I am constantly asking myself how best to allocate capital at high rates of return.
What do you look for in a company before taking an interest in acquiring it?
Beyond our acquisition criteria, three of the things that we look for are:
- A clear definition of the market that the business is in, their market positioning, and the competitive landscape;
- The level of attrition and quality of customers we are acquiring; and
- An idea of how mission-critical the software product is.
Our ideal acquisition is a business that has a high market share, low attrition, and scores high on the mission-critical scale. As you would imagine, there are other factors we look at, but these are certainly key boxes to check off when assessing a new investment.
Why would you say that quality of leadership is key when acquiring businesses?
Strong leadership is absolutely key for a number of reasons:
- Part of what we do is share best practices and we fully expect to learn from our new acquisitions; and,
- Being so decentralized, we depend on the local leadership to drive the strategy, growth, and profitability of the business.
When integrating a company into Volaris, what are key priorities on the finance side?
Our integration on the finance side is very low-touch. We’re not looking to be disruptive to the business, so we give a lot of latitude to the acquired company. For example, if there’s a compelling business reason why they should remain on their current accounting system, we don’t require them to integrate into ours.
With that said, we need businesses to report their numbers in a certain way because this allows us to measure all businesses in a consistent format which allows for best practice sharing. Our companies and staff may come from different cultures and speak different languages, but we are able to speak a common financial language by ensuring a consistency in reporting.
Ongoing learning is one of our key values at Volaris. Can you describe how the finance team supports companies in that effort?
We have found that our businesses can grow more quickly and sustainably over time when they review, consider, and action change based on benchmarking data – basically, looking at meaningful comparative analysis with their peers.
Post-acquisition, we assign integration managers to work with new businesses, and we have intelligent leaders who embrace our ratios and metrics to drive top quartile performance.
We also put out a lot of corporate analysis about M&A best practices, and our decentralized structure means that we can compare our activity with what other groups within Volaris or Constellation are doing, and potentially implement new best practices.
Any final thoughts to add about the role of finance at Volaris?
Like Volaris, our parent company, Constellation Software, is an organization that truly values the role of finance. Financial discipline, governance, and overall stewardship are important to ensure the sustainability of our businesses for the long term. Our metric-driven approach means that the numbers generally guide the answer which allows us to be dispassionate in our decision making.
Finance is incredibly rewarding, and as such, we find many opportunities for finance leaders to move around and grow professionally.
Have more questions for our CFO?
Feel free to connect with Brian on LinkedIn.