Stout provided buy-side financial due diligence services to a private equity platform executing the acquisition of a Phase II-IV clinical research site located in the Midwest. The target company conducts clinical trials across a range of therapeutic areas, including gastroenterology, gastrointestinal oncology, hepatology, obesity, type 2 diabetes, and related conditions.

Stout’s Financial Due Diligence team collaborated closely with management and the client’s financial advisors to perform a comprehensive quality-of-earnings analysis. A key component of the engagement involved converting revenue from a cash to accrual basis, leveraging detailed data from the clinical trial management system. This process led to refinements of the initial adjustments proposed by the financial advisors.

As part of this analysis, Stout assessed the financial impact of factors such as Contract Research Organization (CRO) and Sponsor holdbacks, screen failures, start-up and close-out fees, patient stipends, and other revenue-related components.

Stout remained actively engaged throughout the transaction, supporting the client on matters related to the purchase agreement, financial rollforwards, and the determination of the net working capital target.