CFOx provided an independent sponsor with financial due diligence in connection with its first platform investment, involving the acquisition of a specialized motorsports business comprised of two complementary operating entities within the karting and competitive racing ecosystem.
Together, the businesses represent a vertically integrated presence in the karting industry, spanning equipment distribution, technical support, and race event operations. While operating under distinct business models, the entities share common end markets and strategic alignment within the broader motorsports industry.
CFOx’s Transaction Services team performed a comprehensive Quality of Earnings analysis across both entities, with a focus on assessing normalized earnings, entity‑level performance trends, and the financial dynamics of two interrelated businesses evaluated under a single investment thesis. Our work considered differences in revenue models, seasonality, cost structures, and operational drivers inherent to distribution‑based and event‑driven operations.
In addition to sustainable EBITDA, the engagement included an evaluation of Net Working Capital, consistency of accounting practices, and historical adjustments necessary to present a clear and comparable view of earnings across the combined platform. The analysis provided the sponsor with actionable insight into historical performance, key normalization considerations, and areas of focus as the platform moves forward under new ownership
Following the transaction close, CFOx is engaged to support the business in establishing accrual‑basis accounting under GAAP, streamlining financial reporting processes, and building a scalable finance function to support continued growth.
This engagement highlights CFOx’s ability to support independent sponsors at the platform‑formation stage, delivering thoughtful, execution‑focused diligence on first‑time acquisitions and laying the groundwork for future growth and add‑on strategies across complex, multi‑entity operating structures
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.
Services Provided:
- Quality of Earnings (QoE) Analysis
- Net Working Capital Analysis
- Net Debt Analysis
- Proof of Cash Analysis
- Payroll and Tax Reconciliations
- AR, AP, and Inventory Evaluations
- Handoff to CFO Services Team
