Stout provided buy-side financial due diligence services to a private equity platform in connection with its acquisition of a New Jersey-based fee-only registered investment advisor (RIA) with $1.3 billion of assets under management (AUM). This acquisition supported the expansion of the client’s presence in the Mid-Atlantic region and the scale of offerings and capabilities to its clients.

Our Financial Due Diligence team conducted a quality-of-earnings analysis, along with an evaluation of the Target’s minimum operating cash requirements and net debt position. The team also performed key analyses to assess the historical drivers and events influencing AUM generation and retention, a cash proof analysis to ensure the integrity of the base financial information of the unaudited Target, and a run-rate analysis to provide a forward-looking perspective on the business based on recent performance.

Our Stout Tax Advisory Services team provided tax diligence and structuring advisory on the acquisition, and this work encompassed key analyses around risks related to the Target’s S corporation status, payroll taxes, state income taxes, sales/use, property taxes, and compliance with industry-specific regulations, including transfer tax analysis associated with the transaction structure.