Stout provided buy-side financial and tax due diligence services to a private equity fund that was simultaneously acquiring two distinct digital marketing solution businesses. The businesses offer outsourced marketing capabilities, including strategy, content creation, digital platforms, digital advertising, print advertising, and more.
The Stout financial due diligence team performed quality-of-earnings analysis, net working capital procedures, and a synergy analysis. The diligence and synergy analysis included numerous normalizations to sell-side adjustments, headcount rationalizations, new customer run rates, and cost of goods sold initiatives, among other areas of focus. The team performed multiple prompt roll-forwards of the analysis, which was key in late negotiations on purchase price and net working capital.
In addition, Stout performed tax due diligence on the stock acquisition, including key analysis around S corporation qualification, pre-closing restructurings, tax attribute carryforwards, sales tax and payroll tax compliance, and more.
Post-diligence, Stout’s Business Valuation service offering assisted the company in the purchase price accounting of the opening balance sheet through valuing trade name, developing technology, rolled equity and earnout, and favorable/unfavorable leases.