Stout’s Financial Due Diligence (FDD) team provided sell-side financial due diligence services to an ESOP-owned provider of commissioning, qualification, and validation services to life sciences and data center facilities that was acquired by a private equity firm focused on healthcare and related industries. Additionally, the FDD team worked cross-functionally with our Investment Banking and ESOP Advisory teams to ensure alignment on deal structure, ESOP-related financial considerations, and the overall sale process.

Our FDD team performed a quality-of-earnings to assist the Company in preparing for the sale process, addressing buyer inquiries during the sale process, and supporting the closing of the transaction. Due diligence support included aggregating trial balances and transactional level detail across 20 different business units and multiple currencies using our data analytics capabilities. The quality-of-earnings analysis focused on normalized EBITDA including the following:

• Adjustments for non-recurring and non-operational items
• Hindsight revenue recognition adjustments
• Assessment of discontinued operations and the financial impact of new location ramp
• Run-rate impact of various cost savings initiatives
• Adjustments reflecting the impacts of transitioning from an ESOP to a non-ESOP ownership structure under an assumed go-forward profit share model

Additionally, we developed an adjusted profit and loss statement that allowed the Company to assess the business’ adjusted performance inclusive of the adjustments identified through the quality-of-earnings analysis.