Provided buy-side financial diligence to a health science company

Provided buy-side financial diligence to a health science company

Stout provided buy-side financial diligence and business valuation services for a publicly traded health science company. The acquisition was for a self-contained segment of a multinational business which was being carved out for the sale. The business operated as a flavored nutritional supplement provider through retail and e-commerce platforms.

The Stout Financial Due Diligence team performed quality-of-earnings analysis, net working capital, and net debt procedures. The Stout team assessed the impact of the divestiture from the parent including any standalone costs or changes in structure under the new ownership. A key focus area related to preparing analysis of historical research and development spend along with the run rate of newly launched products. Stout also assisted in net-working-capital negotiations and purchase agreement review, which reflected the need for higher inventory levels amid the growth of the business and recent supply chain slowdown.

The Stout Fairness Opinion team worked simultaneously with the Financial Due Diligence team in rendering an opinion as to the fairness, from a financial point of view, of the consideration being paid by the company in the transaction.

Post-diligence, Stout also assisted the company in the purchase price accounting of the opening balance sheet through valuing the trade name, product formulations, customer relationships, and more.