Virtas Partners was engaged by a private equity-owned infrastructure services company to assist with preparation for an IPO, including restatement of historical financial statements, preparation of Management Discussion & Analysis (MD&A), audit preparation and audit support.
Client Background
The private equity owners wanted to pursue an exit of this portfolio company through an IPO versus a sale and the portfolio company was not prepared for this form of exit.The company had not historically prepared financial information that would be required in a public offering (including quarterly financial statements, management discussion and analysis (MD&A), SEC compliant disclosures, etc.) and also needed to evaluate whether financial information would need to be restated prior to any SEC filing. In addition, the company did not have systems and processes that would enable ongoing SEC reporting compliance.
Scope of Services
- Prepared detailed calculations for two years of quarterly restatement adjustments
- Prepared adjusting quarterly trial balances reflecting restatement and audit adjustments
- Performed detailed technical accounting analysis on revenue recognition
- Prepared quarterly fluctuation analysis to support the auditor quarterly reviews as well as MD&A
- Drafted key SEC financial statement disclosures
- Supported the completion of the PCAOB complaint audits
Significant Milestones
- Identified and calculated ~40 adjustments for each quarter in the two years of historical financial statements
- Delivered adjusting trial balances reflecting restatement and audit adjustments
- Prepared mapping for trial balance to new presentation format for external financial statements including allocation method for segments
- Delivered quarterly fluctuation analysis
- Sign off by auditor on lease and revenue recognition conclusions
- Completion of PCAOB audits
Value to Client
- Two years of preparation procedures were performed over a period of nine months
- The client did not have the resources to perform the procedures necessary to prepare for an IPO
- Technical expertise on topics critical to the completion of PCAOB audits
- Capability and familiarity with client’s accounting software enabled team to navigate independently to retrieve and analyze data