Integrated Diligence for a Mid-Market PE Firm
Challenge
A middle market private equity firm focused on the services and technology industries was evaluating an HVAC company to add to their portfolio. In order to ensure a successful outcome, they needed a comprehensive understanding of the financial, tax, and operational issues underlying the transaction.Working with Riveron as the single service provider across the financial, tax, and IT workstreams also enabled both the private equity firm and portfolio company to benefit from streamlined processes, requests, and reporting.
How we helped
Riveron was engaged to conduct the integrated diligence, starting with the financial analysis, which included revenue recognition and creating a new pro forma P&L to show what the company looked like after recent strategic initiatives. We also assessed the potential tax liabilities that could pass to the private equity firm in connection with the acquisition. From a technology perspective, Riveron evaluated the quality and scalability of the company’s IT systems as a platform acquisition, including areas that could be improved during the hold period.
Results
Based on the insights provided by Riveron through the integrated diligence analysis, the private equity firm successfully completed the transaction with a thorough validation of the investment model. Working with Riveron as the single service provider across the financial, tax, and IT workstreams also enabled both the private equity firm and portfolio company to benefit from streamlined processes, requests, and reporting.
Following the successful close, the private equity firm retained our services to provide continued support, including analysis of the closing net working capital to determine the corresponding adjustment for the final purchase price and monthly financial statement earn-out analysis for the subsequent year.
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