A team of talented PBO Advisory Group professionals recently assisted a local technology company through a sale to a publicly-traded, international company with revenues north of $2 billion. This sale illustrates how we work with first-time sellers from start to finish…and beyond.
PBO Advisory Group was initially retained to assist with preparing our client for a future exit transaction. This included a financial reporting uplift project that upgraded the company’s financials to adhere to GAAP standards, re-design of the chart of accounts to provide for natural and functional expense reporting, and development of a financial forecast model. In addition, PBO Advisory counseled the client on what an exit process would look like and what to expect.
Soon after completion of the prep phase, the company received an unsolicited offer from a Tokyo-based buyer.
PBO Advisory, working closely with a capital advisory firm, analyzed the offer and forecasted the expected after-tax proceeds the sellers could expect. Our team then shifted efforts to prepare for populating a virtual data room by screening and organizing the vast amounts of documents that were expected with the acceptance of the offer. The process included documents that were readily available and many that had to be mined from deep in various places.
Soon after, our group received the first of many information and document requests from the buyer and the buyer’s diligence advisors, in addition to requests to participate in multiple meetings and phone calls.
Along the way, we calculated the target net working capital and the workbook to document the calculation and definitions.
As due diligence was close to an end, we shifted our focus to supporting the legal counsel by preparing the first rough draft of the stock purchase agreement disclosure schedules. Throughout the transaction phase, we also worked closely with the headquarters teams in Tokyo, as well as the tax and purchase valuation teams and the auditors.
After a smooth but intense process, the deal closed on May 15, 2019.
Even after the sale, PBO Advisory’s work wasn’t done. We calculated the closing and final net working capital with a mid-month close and closing workbook. We also developed a business plan in the buyer’s requested format.
Beginning with the opening balance sheet, we implemented international financial reporting standards (IFRS) to all the financial reporting, which required PBO Advisory to draw upon our international capabilities. Additionally, we integrated all of the reporting into the buyer’s partner company’s template. We also supported a third-party valuation firm in determining the fair value of the opening balance sheet and goodwill.
The buyer was so impressed with the hard work and creative approach PBO Advisory brought to the acquisition, we have been engaged to continue financial planning, reporting, and analysis for the parent company. We are also providing outsourced CFO services to U.S.- and U.K.-based operations and outsourced human resources services to the U.S. operations.
Even with the short time frame, the process, while intense, went smoothly. The highly skilled PBO Advisory professionals’ extensive experience in acquisitions, as well as in domestic and foreign financial issues, played a key role in helping our client/seller and the buyer – who ultimately also became our client – work through the first-time sale of a business. PBO Advisory is proud of our group and the role each member played in this exciting chapter of both companies’ life cycles.