Provided due diligence to PE platform acquiring automotive manufacturer

Provided due diligence to PE platform acquiring automotive manufacturer

Stout provided buy-side financial services for a private equity platform business in the automotive industry. The acquisition was for a Canadian manufacturer and distributor of refinishing and repair products for automotive, aviation, industrial, and marine applications.

The Stout Financial Due Diligence team performed a quality-of-earnings analysis, net working capital, and net debt procedures. The Stout team assisted in various analyses, including understanding the impact of cash vs. accrual accounting and assessing the potential impact of aged or slow-moving inventory.

As the acquisition was based in Canada, other analyses were performed, including a constant currency, evaluation of R&D credits, and more. Stout was involved throughout the process, assisting the buyer with items pertaining to the purchase agreement and net-working-capital peg. Additionally, Stout performed tax due diligence on the stock acquisition, which included key analyses around the Canadian Controlled Private Corporation status, GST / HST taxes, 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 the trade name, fixed assets, and more.