Stout provided buy-side financial and tax due diligence for a top-60 advisory CPA firm that operates as an investment bank, advisory, tax, and assurance firm servicing clients across a broad range of industries.

Our contributions included support during the entire transaction process, including the development of a quality-of-earnings databook, detailed reports, net working capital analysis, net debt procedures, proof of cash, purchase agreement support, and tax due diligence.

During the quality-of-earnings process, we combined the historical financials from the firm’s acquisitions to create an acquisition-adjusted view of the business throughout the historical period. We 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, and more.

Additionally, our team was closely involved in the review of the purchase agreement terms, including providing critical feedback and preparation of exhibits supporting net working capital, indebtedness, and more.

We also performed tax due diligence, including key analysis related to S corporation status, transaction structuring to limit successor liability and to avoid anti-churning concerns, and purchase price allocation advisement.