Case Studies

Purchase Accounting and Working Capital Settlement for a $20M Multi-Entity Acquisition

Purchase Accounting and Working Capital Settlement for a $20M Multi-Entity Acquisition

Situation

Following the $20 million acquisition of four related B2B services entities, MMG was engaged to support the post-close purchase accounting process. The buyer needed to establish an accurate opening balance sheet, complete the net working capital true-up, and reconcile financial information across multiple legal entities before finalizing the settlement with the sellers.

Solutions
1

Completed Purchase Accounting

MMG reviewed the acquired entities' opening balance sheets, prepared the required purchase accounting entries and GAAP adjustments, reconciled inter-company activity, and established the opening balances for the combined business.
2

Prepared the Net Working Capital True-Up

MMG analyzed the acquired entities' financial information and calculated the final net working capital adjustment, providing management with the supporting analysis needed to complete the post-closing settlement process.
3

Supported Seller Negotiations

When the final calculation differed significantly from seller expectations, MMG worked directly with ownership to present the supporting analysis and explain the methodology behind the adjustments. MMG provided the financial support needed to work through the differences and reach agreement.
Results

MMG completed the purchase accounting and net working capital true-up within the transaction’s required post-close timeframe, giving the buyer an accurate financial starting point for the newly combined business.

The engagement provided management with the technical accounting expertise and financial analysis needed to navigate a complex four-entity acquisition and successfully complete the working capital settlement with the sellers.

$20M

Acquisition

4 Entities

Combined in the transaction

GAAP

Compliant
Opening balance sheet and purchase accounting

Acquisition On-boarding and Exit SupportConsulting ServicesB2B Services
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