Stout provided due diligence services for leading advisory CPA firm Baker Tilly US, LLP in securing a strategic investment from Hellman & Friedman and Valeas Capital Partners.

Baker Tilly has demonstrated remarkable growth over the past five years, doubling its workforce and expanding its presence nationally and internationally, securing its position as a top 10 advisory CPA firm in the United States. The investment by Hellman & Friedman and Valeas Capital Partners is one of the largest U.S. advisory CPA private equity transactions to date. The transaction is scheduled to close in June 2024.

Stout’s Work

Throughout the due diligence process, Stout’s Financial Due Diligence team collaborated closely with Baker Tilly’s management, including the Corporate Controller, CFO, COO, and Director of Corporate Development, to meticulously prepare comprehensive sell-side financial analyses and support materials.

Stout’s contributions included the development of a quality-of-earnings databook, detailed reports, net-working-capital analysis, and net debt procedures, all of which were instrumental in guiding Baker Tilly and investment banking firm William Blair as they went to market.

During the quality-of-earnings process, Stout combined historical financials from the firm’s 15+ acquisitions to create a pro forma view of the business throughout the historical period. Stout assisted in the analysis of key financial and operational areas for the business, including revenue recognition for work-in-process jobs, headcount and utilization trends, partner compensation models, cash-to-accrual accounting, capital lease conversions, and more.

The Stout and Baker Tilly management team worked together throughout the process to identify and quantify analyses that were integral in the valuation of the business. Additionally, the Stout team was closely involved in the review of the purchase agreement terms, providing critical feedback and preparation of exhibits supporting net working capital, indebtedness, and more.

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