Stout provided buy-side diligence services for a private equity firm making a platform investment in a premier maritime supplier of fluid control valves, actuators, strainers, parts, and services to the United States Navy and Commercial Marine industry. The business specializes in the shipping, servicing, and maintenance of critical fluid control systems, ensuring reliability and efficiency for maritime operations.

The Financial Due Diligence team performed quality-of-earnings analysis, net working capital, and net debt procedures. A key was evaluating sales and margin by contract, exclusivity arrangements, and more. In addition, other focus areas included inventory reserve accounting, as they purchased inventory to stock and held certain parts which were slow moving. The team performed sell-through analysis, identifying the historical sell-through timelines for parts to generate a reserve.

Post-acquisition, the Due Diligence team collaborated with the client and management to prepare the net-working-capital true-up. The process required backdating the month-end close to account for an inter-month closing of the transaction. The team also prepared a monthly cash flow statement for the initial monthly reporting packages required for internal and bank reporting.

Additionally, the Stout Valuation Advisory team prepared the opening balance sheet, which entailed the valuation of intangibles.