Stout provided sell-side due diligence services for a top 15 accounting firm, leading to its merger with a top 10 accounting firm to form the sixth largest accounting firm in the United States.

As part of the diligence efforts, our Transaction Advisory team worked in close partnership with management — including the COO, Director of Finance, and Senior Accounting Manager — to develop a detailed sell-side quality of earnings databook and report.

As part of the quality-of-earnings process, we incorporated historical financial data from the company’s 10 acquisitions to build a pro forma view of the business over the historical period. The team also evaluated critical financial and operational metrics, including staffing levels and utilization patterns, partner compensation structures, work-in-process reserves, non-recurring expenses and start-up costs, and other key considerations.

Additionally, we supported the company throughout the merger process by preparing multiple rollforward analyses through signing and close of the transaction.

The sell-side analysis was a key deliverable that contributed to smooth discussions and a streamlined sale process with the buyer.