Stout provided sell-side financial due diligence services to a middle-market private equity firm in its divestiture of a portfolio company, a leading producer of refrigerated salsa and dips across the United States.
Diligence was initially performed a year prior to the Company’s exit in conjunction with a recapitalization of the Company’s balance sheet. Stout worked closely with the Company and its lender to develop the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be used in the underwriting process. Afterward, Stout was re-engaged to update its analysis for a banker-led auction process that included a comprehensive report focused on quality of earnings, net working capital, and the Company’s historical financial statement trends. Stout assisted the Company throughout the process, including multiple roll-forwards of our analysis, responses to buyer inquiries, and the negotiation of the purchase agreement, including the working capital target.