When a $4 billion multinational public company with an already stretched team needed a set of carve-out financial statements for one of its $200 million businesses, the task was far from straightforward. The carve-out business had never operated on a stand-alone basis, had international operations and a defined benefit pension plan, and its treasury operations were commingled with the parent company.

To complicate matters further, the acquirer’s Form 8-K required two years of audited and most recent unaudited comparative interim financial statements to be filed within 75 days of closing the deal. The Form 8-K also required a pro forma P&L for the most recent full year and interim period, as well as a pro forma balance sheet.

All in all, the company needed guidance.

WM worked on-site at the seller’s headquarters to support the preparation of the audited annual and unaudited interim financial statements.

Analyzing the parent’s corporate expenses, WM developed and documented a methodology to allocate expenses to the carve-out business. The team also assessed the parent company’s stock-based compensation (SBC) and identified the allocation of SBC expense to the carve-out entity, including a detailed footnote.

WM developed subsidiary-level cash flow statements in functional currency and combined them into a USD financial statement cash flow. Next, the team developed an audit-ready consolidation and cross-walk from the parent’s records to the carve-out entity’s stand-alone financial statements.

In addition to supporting the sellers, the WM team also supported the acquirer in the preparation of the Form 8-K including the pro forma financial statements.

WM facilitated the successful issuance of the audited stand-alone financial statements and assisted the acquirer with filing its Form 8-K, well before its deadline, safeguarding the acquirer’s continued compliance with SEC regulations and ongoing access to the capital markets.