Region: Philadelphia
Industry: Professional Services
Service Line(s): Accounting Services
Performed due diligence on an acquisition target for a leveraged buyout firm.
“Through their knowledge and expertise, AC Lordi completed a daunting amount of legwork, brought items to our attention that we had not considered, designed procedures and action plans to address issues discovered during the due diligence process, and delivered all of their reportable items to us in time to meet our aggressive transaction timeline. We were very impressed with their quality of work and professionalism. We will certainly engage AC Lordi for future transaction advisory assignments and for other portfolio company accounting projects.”
Greg Scott
Company Background:
Richard L. Scott Investments, LLC is a private investment firm which makes leveraged buyout, recapitalization/restructuring and growth capital investments in companies in a variety of industries with superior management, predictable cash flow, strong market share and growth potential.
Business Challenge:
Richard L. Scott Investments, LLC sought to acquire an independent company as an addition to the firm’s portfolio.
AC Lordi Consulting Solution:
AC Lordi performed tailored financial due diligence procedures to validate the appropriateness of the target company’s financial statements. This included assessing conformity with GAAP and arm’s length reporting of financial transactions with related parties, as well as performing certain contingency related procedures, including tax and 401(k) compliance issues, searching for unrecorded liabilities, and conducting a detailed examination of Incurred But Not Reported reserves. We reviewed external auditor workpapers to establish the sufficiency of audit procedures performed by various regional accounting firms. We presented reports of observations, including quality of earnings schedules (EBITDA analyses) showing all proposed financial statement adjustments. We also performed high level federal, state, local, and sales and use tax reviews.
Value Delivered:
In addition to identifying high risk areas and providing Richard L. Scott Investments, LLC with specific observations distilled though our customized, top-to-bottom due diligence plan, we also provided our comments and recommendations on other areas including competency of accounting personnel at the target company and sufficiency of systems both at current capacity and in consideration of scalability. The combination of our contributions enabled the firm to make well informed business decisions with regards to valuation, and business and management enhancements of the target.