When a leading private equity firm acquired a highly profitable specialty chemicals company that was carved out by a Fortune 100 company, Stout provided valuation and technical accounting services for certain equity securities issued in the transaction.
Stout provided periodic enterprise and equity valuations for the company, which was well in excess of $1 billion on an enterprise basis. The equity value was then allocated to the equity securities, including vesting units that participate at various multiple-on-invested-capital (MOIC) thresholds and special bonus rights. Our valuation was used for both financial reporting and tax compliance requirements.
Additionally, Stout's technical accounting services included recommendations regarding the determination of grant date, determination of liability or equity treatment, identification of vesting conditions, recognition of the requisite service period, recognition of compensation expense, and recommendations for pre-vesting forfeiture.