In connection with a controlling private equity investment in the form of debt and equity instruments, Stout provided various valuation and consulting services to the management team of a traffic safety technology company. Specifically, Stout determined the total invested capital of the acquired business based on a “back-solve” approach utilizing an option pricing method and the price paid by the controlling investor, including a segmentation of the controlling investor’s debt and equity securities. Stout then allocated the total invested capital to the acquired assets and assumed liabilities, including a discrete valuation of personal property, trade names and trademarks, proprietary technology / software, and customer relationships.

Stout’s scope of work also included technical accounting consulting services associated with preparation of an opening balance sheet schedule and an ASC 805 accounting memorandum. Upon completion of the acquisition accounting work, Stout’s scope of work was expanded to include incremental technical accounting consulting services associated with setting up an effective interest schedule for new debt securities and establishing the accounting for various restricted stock unit grants.