Client Challenge

Stout advised both the Buyer and Seller through the successful execution of a highly complex carve-out transaction and supported post-close integration efforts during the critical first 100 days.

The Seller, a founder-owned business undergoing its first M&A transaction, sought to divest only a portion of its operations. The Buyer, by contrast, was a sophisticated public company with extensive acquisition and integration experience and high expectations for financial transparency, reporting accuracy, and operational rigor.

The transaction faced immediate challenges due to significant deficiencies within the Seller’s finance and accounting infrastructure. The organization lacked a mature accounting function, operated primarily on a modified cash basis, and had limited financial controls, reporting processes, and operational visibility. The accounting function was largely managed by an administrative resource with limited accounting experience and minimal organizational support. Compounding the complexity, financial data was fragmented and commingled across multiple disconnected QuickBooks Desktop environments, making it difficult to isolate the carve-out entities and produce reliable standalone financial information.

As a result, the Buyer had limited confidence in the underlying financial performance of the business, creating elevated diligence, valuation, and integration risk. Stout was engaged to help reconstruct financial information, establish operational and financial visibility into the carve-out business, support transaction execution, and ultimately enable a successful close and post-transaction integration despite a highly challenged back-office environment.

Our Approach

Seller Support

Prior to close, we embedded alongside management to perform a comprehensive assessment of the business operations and finance and accounting environment. Through this assessment, we developed a detailed understanding of the company’s processes, systems, and operational gaps and designed an interim operating model to stabilize the back office and support transaction readiness.

We rapidly stood up an end-to-end finance and accounting function, including transitioning the business from multiple QuickBooks Desktop instances into a centralized QuickBooks Online environment to improve financial visibility and reporting consistency.

Stout deployed a dedicated team to manage critical back-office operations, including:

  • Accounts receivable and accounts payable processes
  • Month-end close activities
  • Conversion from cash-basis to accrual-basis accounting
  • Financial reporting and management visibility
  • Data organization and transaction support

Working collaboratively with both the Buyer and Seller throughout the process, we established transparency and alignment among all stakeholders. After stabilizing operations and successfully completing multiple month-end closes to validate the integrity of the financial information, we supported the parties through transaction close activities, including:

  • Preliminary net working capital analysis
  • Closing balance sheet support
  • Financial data validation
  • Ad hoc diligence and transaction-related requests

Buyer Support

Following close, we continued supporting both the Buyer and Seller during the post-transaction integration period. We maintained responsibility for operating the finance and accounting function through several additional closes while simultaneously supporting the migration from QuickBooks Online into the Buyer’s ERP platform. Key post-close activities included:

  • Financial data cleansing and validation
  • ERP migration support and coordination with the Buyer’s IT organization
  • Integration of finance and accounting processes into the Buyer’s operating model
  • Finalization of net working capital and opening balance sheet matters
  • Ongoing operational and financial reporting support

Throughout the integration, we served as the central point of coordination between the Buyer and Seller, helping ensure timely resolution of data requests, management of critical deliverables, and alignment across stakeholders. We also helped mobilize the appropriate internal resources from the Seller organization to support integration and close-related requirements.

Value Delivered

We enabled the successful close and integration of a highly complex carve-out transaction despite significant deficiencies within the Seller’s finance and accounting infrastructure. By rapidly stabilizing and professionalizing the back-office environment, we transformed fragmented and unreliable financial information into a centralized, accrual-based reporting structure that increased transparency and improved confidence in the business’s financial performance. We served as a trusted partner to both the Buyer and Seller throughout the transaction lifecycle, facilitating alignment, managing critical workstreams, and reducing diligence and integration risk.

Following close, we maintained continuity of accounting operations while supporting ERP migration, data validation, and finance integration activities, ultimately helping accelerate the Buyer’s ability to successfully integrate the acquired business into its existing operating and reporting environment during the critical first 100 days.