Stout’s Healthcare Financial Due Diligence team provided sell-side financial due diligence services to a Florida-based healthcare services company specializing in the design, management, and administration of health benefit plans in connection with an investment bank-led sale process. The company operates through multiple affiliated entities with distinct operations and revenue streams.

Our team prepared a sell-side quality-of-earnings databook and report. Key analyses included cash-to-accrual revenue adjustments based on bank deposits and third-party administrator settlement reports, surplus-sharing revenue adjustments, consolidation of affiliated entities’ financials, member-group stratification and retention analysis, adjusted revenue seasonality, headcount by department, and adjustments related to the transition to a proprietary technology platform and the pro forma impact of bringing outsourced administration services in-house.

Our work continued beyond the initial report. We rolled the databook forward as new financial information became available, worked closely with the seller and its investment banker to address the buyer’s diligence inquiries, and prepared net working capital and net debt analyses to support the accounting principles in the purchase agreement.