Case Studies

Sell-Side Due Diligence

Background

A physician-owned clinical research site is approached by a private-equity owned acquiror aggressively consolidating a fragmented industry. The transaction stalls post-execution of the letter of intent due to the Company's inability to support the due diligence process and provide accurate financial information. The buy-side investment bank recommends Paradigm to the Company to perform sell-side due diligence procedures to enable the deal to move forward.

Solutions

  • Cash-to-accrual accounting conversion
  • Executed due diligence procedures including revenue and cut-off testing
  • Developed monthly revenue analysis including revenue by clinical study, development phase, patient volumes, and revenue mix
  • Built revenue pipeline and backlog analysis
  • Constructed monthly financial projections
  • Compiled analyses into due diligence databook including EBITDA table with diligence and proforma adjustments
  • Supported net working capital analysis/negotiation, purchase agreement disclosures, and analysis of earn-out structures

Outcomes

Paradigm's reaction time to immediately deploy a team and complete work streams on an aggressive timeline, allowing the Company to recover lost momentum and provide the necessary information to move forward to a successful closing. Paradigm provided turn-key management for the diligence process allowing the Company to refocus its internal resources on running the business during the sale process.

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