Diligent Grows Rapidly With Help From Stout’s Valuation Services

Diligent Grows Rapidly With Help From Stout’s Valuation Services

The software company undertakes acquisitions with confidence that the valuation work will be done correctly.

July 05, 2023

Diligent was growing fast and needed a valuation partner to keep pace. Upon transitioning from a public company to being privately held in 2016, Diligent, originally specializing in board management software, began a phase of accelerated growth through M&A. It needed to account for everything correctly, ensure compliance, and stay audit-ready while navigating organic and inorganic growth.

For many of its acquisitions, Diligent chose Stout as its valuation provider.

The Client: Diligent

Diligent is a software-as-a-service (SaaS) provider with solutions across governance, risk, compliance, audit, and environmental, social, and governance (ESG). As a leader in the governance space, Diligent builds tools for company leadership to gain clarity into critical issues across the business and make decisions with confidence.

The governance, risk, and compliance (GRC) space was ripe for consolidation, as a variety of disparate software tools existed for board management, audit, risk, compliance, and ESG management. These tools, although serving similar purposes, often lacked integration and cohesion, leading to inefficiencies and complexities for organizations seeking streamlined governance solutions. Noticing this, Diligent has completed many acquisitions to further establish itself as the industry leader in its market and provide its customers with comprehensive GRC SaaS solutions from a single vendor.

As a result, Diligent is not only succeeding in its mission, but it has also expanded its vision to include entity management, internal audit, and third-party risk management, as well as ESG management solutions.

Stout’s Partnership With Diligent

With so much growth, an ideal valuation provider was needed. Diligent chose Stout to provide valuations for purchase price allocations (PPA) for 17 acquisitions, ASC 409a, ASC 718, ASC 350 (annual goodwill impairment testing), and long-term projection modeling.  Many projects involved complex, non-routine equity securities, requiring additional valuation and modeling expertise.

Supporting Diligent’s Acquisition Needs

Through Stout’s support, Diligent successfully navigated all valuation compliance and audit readiness issues during its rapid growth period. Relying on Stout as its outside expert, Diligent could focus its efforts on its growth and M&A, establishing itself as an even clearer market leader through consolidation and a strong product offering.

“Stout helped us through our hypergrowth, allowing us to be nimbler, ensure correct accounting, and sharpen our long-term modeling. Stout was there for every step as we sought to always be in compliance and prepared for an audit.”
- Adam Ginsberg, Chief Accounting Officer at Diligent

The Future of Diligent

Today, Diligent provides unprecedented clarity into every level of its clients’ governance, risk, compliance, audit, and ESG practices. This comprehensive suite of services empowers clients to act with confidence and transform their organizations.

“With Stout, we know we’re getting the right guidance. Since performing a valuation for an M&A transaction is different than accounting for it, Stout’s guidance is their biggest value proposition. Stout has always pushed us to uncover and deliver the right information to arrive at an audit-supportable value.”
- Adam Ginsberg, Chief Accounting Officer at Diligent

Jeremy Krasner, the Managing Director at Stout who served Diligent, explained, “Diligent is the market leader in GRC management software, and it’s been an honor for us at Stout to serve as a trusted partner.”

As Diligent continues to grow and provide organizations with GRC platforms to drive better decision making, the company serves as a key example of how businesses that are experiencing growth through M&A can help manage that change with an ideal valuation provider.