WilliamsMarston Clears the Way for a Foreign Entity Acquisition
Learn how WM assisted a $250 million public company in acquiring a foreign entity, necessitating the first-time audit of five separate entities under U.S. GAAP.
Disparate accounting systems and first-time audits of five separate legal entities under U.S. GAAP present a complex environment.
In a strategic move, a $250 million public company identified a foreign entity to acquire – though the acquisition presented several significant hurdles. The target company had never been consolidated or audited, and its historical financial records were maintained across multiple countries’ accounting principles. The Securities and Exchange Commission (SEC) filing required three years of audited U.S. GAAP financial statements, forcing the target company to evaluate its five separate entities and corresponding ledgers over a multiyear period.]
Adding to the complexity, these entities experienced a high volume of intercompany transactions with little oversight or reconciliation process. Without a functioning consolidation model and numerous complex transactions to evaluate, the company was not equipped to merge these entities and meet their financial statement deadlines.
Close collaboration and technical accounting excellence establish a path forward.
WM immediately deployed a team of experts to the company’s offices in the United Kingdom, working with the management team and external auditors to begin work. The WM team built four unique revenue and cost of sales Excel-based sub-ledgers to facilitate the audit process and serve as an intermediate bridge until the company could implement a new accounting system.
WM completed ten technical accounting memos, which the audit firm’s national office reviewed. These memos covered critical areas, including functional currency, consolidation, stock-based compensation, revenue recognition and purchase accounting.
WM then converted historical records to U.S. GAAP and constructed an Excel-based consolidation model. This model was crucial for accurately reflecting the impact of foreign currency and capturing the intricacies of the high volume of intercompany transactions.
WM’s work landed the company a clean audit opinion and provided the foundation for continued integration.
The impact of WM’s guidance and implemented solutions was significant. A clean audit opinion was issued on the target company’s historical financial statements, and its audited U.S. GAAP statements and the acquirer’s pro forma financial statements were filed in Form 8-K/A on time.
THE TEAM RESPONSIBLE
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Landen C. Williams
Landen C. Williams
Landen brings over 20 years of consulting and executive management experience to WilliamsMarston. Prior to WilliamsMarston, he was a Managing Director in the Accounting Advisory Services practice at KPMG LLP where he advised Fortune 100 companies on the accounting and reporting for mergers, acquisitions, divestitures, restatements, revenue recognition and other complex transactions. He was also one of the firm’s leaders on the new revenue recognition standard; frequently speaking to clients and industry groups on the new standard.
Prior to KPMG, Landen was a Managing Director in the Financial Restructuring practice of FTI Consulting, Inc. where he advised distressed companies on restructuring strategies, liquidity and cash management, and cash flow modeling. Landen started his career in the Audit and Advisory practices of PricewaterhouseCoopers LLP where he rose to the level of Manager. While at PricewaterhouseCoopers LLP, his clients included large SEC registrants in the technology, software and life sciences industries.
Throughout his career, Landen has advised senior management and board members of private and public companies on the accounting and reporting for complex transactions and restructuring. His broad industry experience includes biotechnology, pharmaceuticals, software, technology, telecommunications, manufacturing and financial services. Landen is a Chartered Financial Analyst (CFA) and holds a Bachelor of Science in Business Administration degree from Boston College with concentrations in accounting and finance.
Jonathan T. Marston
Jonathan T. Marston
Jon brings over 20 years of accounting, tax, valuation advisory and executive management experience to WilliamsMarston. Jon’s primary practice areas include mergers and acquisitions, technical accounting and process improvement. He has also served in various interim capacities at the CFO, Director of Corporate Development and Corporate Controller level. His clients include several large private equity firms, private equity-backed companies, and public companies with revenues ranging from $200M to $10B.
Prior to WilliamsMarston, Jon was a Director in PricewaterhouseCoopers LLP’s Transaction Services Advisory practice. While at PwC, Jon provided due diligence, technical accounting, and financial and strategic advice to clients in connection with mergers and acquisitions ranging from $5M to over $20B.
Throughout his career, Jon has advised SEC registrants, foreign public companies, private companies, private equity and VC firms. He has advised management and investors on issues pertaining to US GAAP, IFRS, SEC reporting, financial and operational performance, quality of earnings, revenue recognition, stock-based compensation, initial public offerings, and Sarbanes-Oxley compliance. Jon has significant experience with acquisitions, divestitures, carve-outs, purchase agreements and purchase price adjustment mechanisms. His broad industry experience includes software, technology, telecommunications, health industries, industrial products and consumer retail sectors in the US, Europe, Africa and Asia.
Jon holds a Bachelor of Science in Business Administration degree from Boston College with a concentration in Accounting.
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