Our engagement included a full scope of financial due diligence, including Quality of Earnings analysis, proof of cash procedures, payroll and tax reconciliations, and net working capital and net debt analyses. By executing these workstreams in parallel across both targets, CFOx delivered timely, decision-ready insights that helped our client evaluate earnings quality, cash flow sustainability, and overall financial performance during the investment process.

Throughout the diligence process, CFOx identified several earnings-quality considerations that were not fully reflected in the companies’ reported financial statements. Through detailed transaction-level analysis, our team evaluated the timing, sustainability, and reliability of key earnings drivers, helping management and the private equity sponsor develop a more complete understanding of each company’s underlying financial performance.

The analysis included a review of revenue quality and normalization considerations, as well as the factors driving historical earnings performance. CFOx also evaluated business characteristics and operational metrics that could influence the sustainability of future results. By looking beyond reported financial statements, our team helped the client identify risks and opportunities that were not immediately visible during the early stages of the transaction process.

The engagement also identified two significant QoE adjustments that reduced reported EBITDA and provided the buyer with a clearer picture of normalized earnings. Through detailed analysis of underlying transactions and accounting practices, CFOx helped distinguish recurring operating performance from items that could distort the earnings profile presented during the sale process.

Armed with a clearer understanding of normalized earnings and the drivers behind future performance, the client was able to make informed decisions throughout negotiations and evaluate transaction terms from a position of knowledge. The diligence findings provided valuable context for discussions around valuation and deal structure, helping align expectations between buyer and seller while maintaining constructive dialogue throughout the process.

By combining rigorous financial analysis with a collaborative approach, CFOx helped the parties navigate complex diligence findings without creating unnecessary friction. The result was two successfully completed transactions, supported by a shared understanding of each company’s financial profile and a disciplined approach to evaluating value creation opportunities.

If you would like to learn more about our Transaction Services, please reach out via email (info@cfoxadvisory.com) or schedule a call directly on our Contact Us page.