Provided sell-side services for PE-owned commercial flooring business

Provided sell-side services for PE-owned commercial flooring business

Stout provided sell-side financial services for a private equity platform business in the commercial flooring industry. The company primarily engaged in assembling and manufacturing surface preparation equipment and distributing consumables and parts for the machines. The transaction perimeter included 11 entities across four countries in North America, Europe, and Asia that were acquired and consolidated during the periods analyzed.

Accounting & Reporting Advisory

As the company had not historically performed a detailed consolidation of the financial statements, the Stout Accounting & Reporting Advisory team developed a month-end-closing model that generated bottom-up consolidating financial statements and other budget tracking and reporting tools for stakeholders on a go-forward basis. The team worked closely with the Controller to build out the model, which included the consolidation of four currencies, inter-company activity, numerous enterprise resource planning systems, and more.

Additionally, the Stout Accounting & Reporting Advisory team created a gross profit normalization model to apply a uniform inventory absorption method at the stock keeping unit level.

Due Diligence

The Stout Due Diligence team performed quality-of-earnings analysis, net working capital, and net debt procedures. The Stout Due Diligence team also assisted the Accounting & Reporting Advisory team in preparing the consolidated financials along with other analyses, including understanding the inventory costing methodology, inter-company profit in inventory, and the pro forma impact of a new partnership.

Tax Advisory Services

The Tax team provided sell-side support to the PE sponsor and company being sold. The team worked with the legal team to ensure the purchase agreement contained balanced and fair language addressing the company’s historical tax positions. After the Buyer presented its tax diligence findings to the seller, the team collaborated with the company, the sponsor, and the legal team to develop structural solutions, craft and implement remediation plans addressing the issues presented, and assist the team in measuring implementation impacts and costs.

The engagement showcased collaboration among various Stout groups, enabling a successful exit for the private equity client.