Divestitures

In connection with selling of one of its businesses, a $4.0 Billion multinational public company needed assistance with creating a set of audited, carve-out, annual and interim financial statements to be included in the acquirer’s Form 8-K.

Challenge: 

  • The carve-out business had never been audited on a stand-alone basis
  • The parent company’s finance group was short-staffed
  • The carve-out business had international operations, a defined benefit pension plan, and the treasury operations were commingled with the parent’s
  • The acquirer’s Form 8-K required 2 years audited and most recent unaudited comparative interim financial statements to be filed within 75 days of the deal closing
  • 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

Solutions:

  • WilliamsMarston’s team worked collaboratively with the auditors and sellers on-site at the seller’s headquarters to prepare the audited annual and unaudited interim financial statements
  • Analyzed the parent’s corporate expenses and developed and documented a methodology to allocate these expenses to the carve-out business
  • Analyzed stock-based compensation at the parent and identified the allocation of SBC expense to the carve-out entity including a detailed footnote
  • Developed subsidiary level cash flow statements in functional currency and combined them into a USD financial statement cash flow
  • Developed an audit-ready consolidation and cross-walk from the parent’s records to the carve-out entity’s stand-alone financial statements
  • Prepared the Form 8-K including the Pro forma financial statements

Results: 

WilliamsMarston facilitated the successful issuance of the audited stand-alone financial statements and assisted the acquirer with the filing of its Form 8-K well in advance of its deadline ensuring the acquirer’s continued compliance with SEC regulations and on-going access to the capital markets.

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2017-09-07T14:34:39+00:00