Stout provided buy-side financial due diligence services to a private equity platform in connection with its acquisition of an independent clinical research facility located in Charlottesville, Virginia. The target organization conducts Phase II-IV clinical trials across a variety of therapeutic areas, with a primary focus on internal medicine.

Stout’s Financial Due Diligence team performed a comprehensive quality-of-earnings analysis, alongside detailed net working capital and net debt procedures. The team carried out several key analyses, including a cash-to-accrual revenue conversion to reflect a more accurate picture of earnings, a break-even analysis to assess performance under the company’s relatively fixed cost structure, and an evaluation of customer concentration risk to better understand revenue sustainability.

Additional procedures included the review of historical financial trends, analysis of key revenue and expense drivers, and assessments of normalized margins to account for non-recurring items. These efforts helped quantify the company’s recurring earnings and operational efficiency.

Stout remained actively engaged throughout the diligence process, providing support on matters related to the purchase agreement, financial rollforwards, and the net working capital target. This hands-on approach ensured the client had the financial clarity necessary to move forward with confidence.