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Success Story - Leading Financial Due Diligence for an Acquisition

Providing an Interim CFO to lead financial due diligence and close a deal

Superior CFO Advisory services supporting successful strategic decisions

A private equity backed midstream company signed a letter of intent (LOI) to acquire another midstream company. The acquirer began as a start-up and did not have an accounting and finance organization with internal capacity to complete the due diligence. They came to Aventine Hill for help.

OUR SOLUTION

An Aventine Hill CFO Advisory Partner with extensive experience in oil and gas M&A transactions become the Interim CFO for the company. This was a new role because the current size of the company did not require a full-time CFO.

The negotiation period prior to the LOI had been almost a year. So, the goal was to complete detail due diligence as quick as possible and ensure the deal closed cleanly. The transaction was complex because the company to be acquired was twice as large as the acquirer and had a more diverse mix of assets.

The CFO Advisor coordinated the overall financial due diligence.  This included: 

  • Oversight of the quality of earnings analysis performed by a big 4 CPA firm.
  • Oversight of the valuation of core assets performed by a second big 4 CPA firm. The valuation was a critical component of the purchase agreement.
  • Managing the relationships and detail agreements with the bank syndicate on the credit required to complete the transaction.
  • Providing advice to the board and executive leadership team on the results of the analyses and valuations and ensuring that any obstacles were addressed quickly to stay on schedule.

As the transaction moved to completion, the company recruited for a permanent CFO who would lead the accounting and finance organization of the combined entity. Aventine Hill’s CFO Advisor participated in the recruiting process and assisted the CFO who was hired with transitioning into the role.

RESULTS

With the help of the Aventine Hill Interim CFO, the due diligence was completed within the compressed scheduled desired by the PE firm and company leadership. The transaction was successfully closed.

Because Aventine Hill was able to blend smoothly with the company’s fast-paced entrepreneurial culture, our team was selected to assist with the acquisition integration after the close (learn more here).

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