Read the Case Study
Case Study
WilliamsMarston Clears the Way for Divestiture with Technology Innovation
Learn how WM helped a multi-national public industrial kitchen equipment manufacturer sift through transaction data as they performed a carve-out and divested a large piece of their business.
The Challenge
Intertwined financial transaction data, comingling with legal entities and diverse tech ecosystem made a clean divestment impossible.
A multi-national public industrial kitchen equipment manufacturer determined the time was right to divest a piece of its business, which was not previously operating as a discrete business unit. The manufacturing company was forced to evaluate financial transaction data that had yet to be tagged or delineated between the divesting business unit and the remaining business entity.
With a high-volume of commingling across legal entities and locations, specifically around inventory items, the company found themselves at a crossroads. Complicating matters further, the company’s overseas operations were subject to different systems, data sources and manual consolidation and all accounts receivable (AR) and accounts payable (AP) processes were comingled, serviced and tracked within regional shared-service centers. In an internal effort to unwind the data, the company’s internal IT team attempted to segregate the balances and activity for several months before engaging outside help.
The Solution
In-depth data warehouse exploration and technical scripting introduced a path forward for the company’s successful carve-out.
WM immediately gained access to company’s data warehouses to better understand the structure and potentially relevant data tables available. The team compiled, tested and documented carve-out methodology through the joining of financial, operational and non-financial data.
WM scripted an automated carve-out solution through a combination of Python and SQL script that could be utilized as a basis for U.S. GAAP reporting and the deal trial balance for all periods presented for the carve-out entity. The team also utilized technology to build year-over-year account analytics for comparability and carve-out review purposes. Post-transaction close, WM utilized scripted tools to support the divested business through the closing statement process and period(s) covered by the Transaction Services Agreement.
The Result
WM fixed the issues with the historical data and reporting, leading the company to a successful divestiture and ensuring a clean audit opinion was issued.
Within a 4–5-week timeframe, the base carve-out trial balances for all three periods presented were compiled, pre-pushdown of manual closing accruals. A clean audit opinion was issued on all historical periods included in carve-out financial statements and the company experienced a seamless closing statement and transition period.
THE TEAM RESPONSIBLE
Ready for clear guidance and powerful outcomes? Reach out to the team today.
Meet the Entire Team
Justin Sika
Partner – Southeast Region Accounting Advisory Leader
Justin brings 16 years of accounting, reporting and executive management experience to WilliamsMarston. He provides leadership for diverse clients on numerous strategic financial issues. Justin has advised clients on technical reporting and accounting issues related to business combinations, divestitures, consolidation, bankruptcy and restructuring, debt offerings and related registration (including 144A and public debt syndication), as well as SEC reporting, segment analysis, debt vs. equity classification, exit/disposal activity, revenue recognition (including software revenue recognition under legacy ASC 985-605 and current ASC 606 revenue recognition guidance) and cash flow classification issues.
Prior to joining WilliamsMarston, Justin held senior positions at Aptean and in PricewaterhouseCoopers LLP’s Capital Market and Accounting Advisory Services (CMAAS) practice. Prior to serving in PwC’s CMAAS practice, Justin was in PwC’s Private Company Services (PCS) assurance practice.
Justin holds both a Bachelor of Science in Business Administration and a Masters in Accounting from Appalachian State University and is a Certified Public Accountant in both the states of North Carolina and Georgia.
Aaron Blades
Director – Accounting Advisory
Aaron brings 13 years of accounting, reporting, and advisory experience to WilliamsMarston from Paradigm Advisory. Aaron works with clients on a wide array of complex accounting issues such as revenue recognition, the new leasing standard, business combinations, carve-outs, initial public offerings, SEC reporting and ICFR compliance. His experience includes a range of industries including retail, software, healthcare, manufacturing, construction and financial services.
Prior to joining Paradigm Advisory, Aaron spent seven years with KPMG LLP in the audit practice servicing both publicly-traded and privately-held clients with US GAAP, SEC reporting and Sarbanes-Oxley compliance. During his time at KPMG, Aaron was selected for a rotation in a special assignment program, which focused on servicing clients with accounting advisory needs for large change events including acquisitions, carve-outs and IPOs.
Aaron holds both a Bachelor’s and Master’s degree in Accounting from the University of Central Florida and is a Certified Public Accountant in the State of Florida.
Tim Benefield
Director – Accounting Advisory
Tim brings over 20 years of accounting and advisory experience to WilliamsMarston. Prior to WilliamsMarston, Tim was a Senior Consultant at Paradigm Advisory, LLC, a boutique advisory firm that provides complex accounting advisory solutions to middle market companies that are going through change, while also assisting with external audit support, carve-outs, technical accounting, IPO readiness, transaction due diligence and other challenges commonly encountered in the ripples of a transaction. While at Paradigm Advisory, Tim advised clients on a variety of complex matters in multiple business sectors and industries, including software, biotech, manufacturing and retail.
Prior to Paradigm Advisory, Tim worked for eight years as the Senior Director of Finance and Accounting at BlueCross BlueShield of SC, leading a team of accounting professionals in all areas of finance, accounting and financial reporting. Prior to BlueCross, Tim held various roles, including Controller, Financial Reporting Manager and Senior Manager of Accounting at both private and public companies. Tim’s areas of expertise include forensic accounting, financial reporting, and process improvements, including extensive ERP implementation experience and multiple implementations of Sarbanes Oxley compliance.
Tim holds a Bachelor of Science from Southern Wesleyan University and an Associates degree in Accounting from Midlands Technical College.
Darrell Johnson
Director – Accounting Advisory
Darrell brings over 20 years of information technology, data, and management experience to WilliamsMarston. Since joining WilliamsMarston, Darrell has assisted with the carve financials for a $1.6B transaction requiring significant analytics of several years of financial data. Additionally, Darrell has assisted with the automation of complex revenue recognition models, created scripts to help resolve multinational intercompany balance discrepancies, and used analytics to ensure data integrity across disparate systems, identify KPIs, and assist with a multitude of FP&A, M&A and accounting matters.
Prior to joining WilliamsMarston, Darrell was a director in KPMG LLP’s Deal Advisory practice where he assisted with accounting change and regulatory compliance matters such as leasing or revenue recognition. Additionally, Darrell used technology and data tools in the M&A space to assist with integration and separation matters such as discontinued operations, held for sale accounting, intercompany matters, CTA/FX issues, fixed asset and legal entity bifurcation, and carve-out financial statements.
Darrell is a member of the North Carolina State Bar. He also holds a Bachelor of Arts degree in Mathematics from the University of North Carolina at Chapel Hill, a Master of Science in Information Technology and a Master of Business Administration from the University of Maryland, University College, and a Juris Doctor degree from the Mitchell Hamline School of Law.
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