Stout provided buy-side financial due diligence services to a technology platform related to its acquisition of a digital media business. The deal provided valuable intellectual property that could be scaled across the rest of the business.

We supported the client through quality of earnings analysis, net working capital and net debt assessments, and other transaction support. The target business reported its financials on a cash basis, which required us to convert subscription-based revenue (among other accounts) to an accrual basis by preparing deferred revenue waterfalls by billing type. The output of these analyses allowed the client to underwrite EBITDA and served as key information for the purchase agreement and post-close integration.

Our due diligence services helped support the client’s initial valuation, purchase agreement negotiations, and post-close integration planning through calculating adjusted EBITDA, identifying and modifying reported financials for deviations from U.S. GAAP, and other deal-critical insights.