Navigating the Carve-out Process for a Payment Processing Provider
Challenge
When a leading private equity fund acquired a payment processing subsidiary from a public company, two years of audited financials were needed to prepare the standalone, carve-out financial statements. This required obtaining financial information from the former parent company in a timely manner which proved challenging. Further complicating matters, the acquired company, which was transitioning to a standalone organization and a new ERP, had limited accounting personnel and was heavily dependent upon its former parent’s shared services center. The company’s accounting team had neither the bandwidth nor the expertise needed to complete the financials and support its upcoming first-time audit.The implementation of NetSuite enabled enhanced financial reporting and delivery of monthly reporting packages and KPI’s to the private equity fund.
How we helped
Riveron was engaged to prepare the company’s carve-out financial statements and support it through the audit process. Since the company had a limited accounting function, we stepped in to serve in a financial reporting and accounting capacity until a full team was hired and trained. We completed the preparation of financial statements, purchase accounting, and account reconciliations, provided audit and technical accounting support, and implemented basic controls. Working with all parties, including the company, its former parent, auditors, and the private equity fund, we identified key milestones and innovative solutions to address the scarcity of data.
Additionally, as part of its transition to a standalone company, the management team decided to implement NetSuite as its ERP and general ledger system. We implemented the system and served as the liaison between the management team and NetSuite throughout the process. We also prepared and managed the project plan, migrated historical financial information, and set up push-button reporting for the private equity fund.
Results
With the historical carveout financials in place, along with the repeatable financial reporting processes Riveron implemented, the annual audit process for the company is now streamlined. Through a strengthened account reconciliation process, the company is also able to facilitate a repeatable monthly close process. In addition, the implementation of NetSuite enabled enhanced financial reporting and delivery of monthly reporting packages and KPI’s to the private equity fund.
With Riveron’s support, the company delivered the audit reports within the filing window, despite the numerous challenges faced with the first-time, carve-out audit. Following the successful project, we have continued to work with the company on technical accounting matters, including implementing a new accounting standard, performing analysis on new debt agreements, supporting two additional acquisitions, and assisting with a potential public filing.
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