Stout provided buy-side financial due diligence services to a private equity platform in connection with its acquisition of a fee-only RIA with over $800 million of assets under management (AUM). This acquisition supported the client’s continued geographic expansion and diversified the scale of offerings and capabilities to its clients.

Our Financial Due Diligence team performed a quality-of-earnings analysis, along with an evaluation of the Target’s minimum operating cash requirements and net debt position. The team also performed key analyses to assess the historical drivers of AUM generation and retention, a cash proof analysis to ensure the integrity of the base financial information of the unaudited Target, and a run-rate analysis to provide a forward-looking perspective on the business based on recent performance.

Our Tax Advisory Services team provided tax diligence and structuring advisory on the acquisition, and this work encompassed key analyses around risks related to the Target’s S corporation status, state nexus considerations, sales/use, payroll and property taxes, and compliance with industry-specific regulations, including transfer tax analysis associated with the transaction structure.

Additionally, we supported the review and drafting of the financial and tax aspects of the purchase agreement and preparing disclosure schedules and other exhibits.