During a recent add-on acquisition, an existing client of CFOx experienced the value of engaging CFOx for multiple phases of the acquisition process. The client, a PE-backed audio production and marketing platform, engaged CFOx for both financial due diligence and accounting transition services which resulted in synergies and technical efficiencies.
Financial Due Diligence
Based on a pre-established relationship with the client, CFOx was initially engaged to provide buy-side financial due diligence services during the acquisition process. The target was ultimately acquired by the client.
The acquiree is a full-service advertising agency located in Dallas, Texas. The agency builds brands using data driven strategies, influencer marketing, modern video production, social content creation, digital media, and creative thinking.
In addition to performing a Quality of Earnings analysis, the CFOx Transaction Services team prepared Net Working Capital and Net Debt analyses for the client. In-depth analysis was also performed on the acquiree’s methodology around core accounting.
Accounting Transition Services
As a result of our interaction with the acquiree’s accounting department throughout the diligence process, the CFOx CFO Services team was engaged by the client to perform an accounting transition of the acquiree’s key accounting and business functions, accounting software, and systems. The scope of the accounting transition engagement included:
- Documenting the acquiree’s accounting policies & procedures, including documenting process narratives for the key accounting areas.
- Transitioning the acquiree’s bank accounts, credit cards, and payroll system.
- Determining and recording Opening Balance Sheet and Purchase Accounting journal entries.
- Advising on future accounting team hiring.
- Integrating the acquiree’s standalone financials into the client’s consolidated financial statements.
Results
A collaborative approach from CFOx produced successful outcomes during each phase of the transaction. Our client appreciated being able to rely on continuity across the CFOx team resulting in consistent, high-quality deliverables and efficiencies gained from knowledge and information-sharing throughout the acquisition process.
Throughout the process, CFOx provided additional insight by leveraging our complementary suite of services related to due diligence, accounting integration, and financial reporting.
If you would like to learn more about our Financial Due Diligence and Accounting Transition services, please reach out via email ([email protected]) or schedule a call directly on our Contact Us page.
CFO Services Provided:
- Accounting Integration & Transition
- Processes & Procedures
- Financial Reporting
Transaction Services Provided:
- Buy-Side Quality of Earnings
