Virtas Partners was engaged by a Private Equity firm to support with evaluating a potential acquisition by performing a quality of earnings (“QoE”) analysis and transition the finance function after closing the transaction.
Client Background
Our Private Equity firm client had signed a letter of intent for the purchase of a small U.S Customs brokerage and logistics company for a designated price. Our client needed an advisor to review the financial information provided by the target company and deliver a report on the quality of the target’s historical earnings, major accounting policies, management adjustments to EBITDA, assets and liabilities, and working capital. In addition, our client needed a referral for tax due diligence resources to assist in due diligence, and fraction CFO/Accounting services once the transaction was closed.
Scope of Services
- Analyzed the historical financial statements of the Target including trend analysis, significant accounting policies and management adjustments to EBITDA
- Identified additional EBITDA adjustments
- Delivered a Quality of Earnings report
- Provided a referral to qualified tax due diligence firm and coordinated tax due diligence requests
- Performed finance function assessment and built finance transition plan
- Executed working capital adjustment and negotiation
- Assisted in completion of opening balance sheet and audit of stub period
Significant Milestones
- Ability to identify additional adjustments to EBITDA not already identified by management
- Swift turn around and delivery of QofE report within tight timeline
- Assessed finance organization needs and built plan for transition
- Completion of critical post close activities including the audit and working capital adjustment Significant Milestones
Value to Client
- Independent confirmation of financial statements provided by the Target
- Negotiated working capital target and post close adjustment
- Completed first audit and transitioned finance organization fit to new ownership and management needs