To quote our Managing Partner, Bert Mills, 2018 was a banner year for Moore Colson. From moving our office to the Galleria to Bert being named a Most Admired CEO and to the incredible growth in our client base and headcount, 2018 was nothing short of exciting. As we continue to grow, we have had the opportunity to work alongside many of you on meaningful and challenging engagements while making new friends and building strategic relationships.
Here are some highlights of what made 2018 special, and we invite you to reach out and say hello or schedule a time to come by and visit our new office, if you haven’t already. 2019 is gearing up to be another exciting year, and we look forward to sharing it with you.
Moore Colson Consulting:
Select Engagement Highlights
Not only does Moore Colson provide expert advice in assurance and tax matters, but it has an extensive consulting practice as well. Moore Colson Consulting is comprised of two distinct practice areas: Transaction Services (buy-side and sell-side due diligence) and Special Services (turnaround, restructuring, forensic accounting, capital advisory, among others). Both practice areas expanded their client base, grew revenue YoY, and added employee and leadership headcount positions. Below are highlights of a small sample of our more interesting engagements of 2018.
Transaction Services
We performed financial due diligence on a 200-employee, $40 million revenue company in the service industry.
What made this engagement particularly interesting?
It was a complex transaction as the target was revamping their workforce structure from independent contractors to W-2 employees. It required a significant amount of work and insight to assess and effectively communicate the pro-forma impact of this change.
How we added more value:
We uncovered an additional upside (through EBITDA addbacks and synergies) of which our client was unaware.
Transaction Services
We performed financial due diligence on a 100-employee, $20 million revenue company in the healthcare industry.
What made this engagement particularly interesting?
The target’s financial statements were incorrectly maintained, with a large number of errors. This resulted in us identifying a significant number of EBITDA adjustments.
How we added more value:
Not only were the additional EBITDA adjustments used in negotiating a lower purchase price, but the net working capital calculation also identified another $250k adjustment that directly saved our client money.
Transaction Services
We performed financial due diligence on an 80-employee, $20 million in revenue company in the construction industry. This was a bolt-on acquisition for the portfolio company of a private equity fund.
What made this engagement particularly interesting?
The target had two subsidiaries – one was a sub-contractor for the other. Despite having reviewed financial statements, the accounting firm was not able to appropriately present consolidating job schedules and thus accurate GAAP financial statements.
How we added more value:
We consolidated the general contractor’s and subcontractor’s job schedules on a pro-forma monthly basis in order to accurately reflect the true economic performance of the consolidated target.
Additional note of interest:
The deal closed, and despite not performing audit services for the portfolio company, the client elected for Moore Colson to perform the audit of the newly acquired target company.
Transaction Services
We performed a product line carve-out financial due diligence on a 150-employee, $60 million revenue company in the food processing industry.
What made this engagement particularly interesting?
Our client (the buyer) needed to understand the cost structure and profitability of specific product lines so they could assess the feasibility of integrating these products into their own operations.
How we added more value:
Financial information was not well maintained due to the financial condition of the seller; therefore, significant assumptions in preliminary information had to be validated and further refined to reflect true performance by product line.
Additional note of interest:
The deal moved forward due to the buyer being able to narrow its purchase to only the most profitable product lines, thereby minimizing the risk of integration.
Special Services: Forensic Accounting
We performed forensic accounting and investigative services for a multi-national automobile manufacturer.
What made this engagement particularly interesting?
The engagement entailed analyzing 3 distinct dealerships, over multiple years, and analyzing over 3 million transactions.
How we added more value:
We provided insight into the dealership owner’s cash flow activities during the period in question.
Special Services: Capital Advisory
We assisted an existing client in obtaining a new revolving credit facility to replace their existing lender. Our client is in the energy industry and experienced a difficult prior year.
What made this engagement particularly interesting?
We contacted dozens of potential lenders and obtained commitments from several and were able to help the client navigate the differing deals and choose one that best fit their needs.
Special Services: Turnaround Advisory
We assisted our client in the takeover of a multi-state rehabilitation business.
What made this engagement particularly interesting?
The business had a significant lack of operational and financial management, and existing management was adverse to our client who controlled the equity.
How we added more value:
We assisted the client with analyzing and evaluating the company’s accounts and cash flows to help them determine the business’s profitability.