A weak quality-of-earnings result is the most common reason deals get repriced

PE & M&A Exit-Readiness Accounting

Most owner-run businesses don't lose value in the sale because their numbers are wrong - they lose value because the numbers were never built to be defended. We build the consolidated financials, the add-back schedule, and the data room before a buyer's diligence team starts asking questions, so your multiple holds.

Get Exit-Ready What We Build
Multi-entity consolidation Sell-side QoE prep

Quick answer

What does exit-ready financial reporting actually mean before a PE sale?

It means your books can survive a quality-of-earnings review without surprises. Buyers and their accountants will normalize your EBITDA, test every add-back, trace intercompany balances across every legal entity, and flag anything inconsistent month to month. Most owner-run businesses fail this not because the numbers are wrong, but because they were never built to be defended — one-off expenses are buried in normal operating accounts, related-party transactions aren't documented, and entities don't consolidate cleanly. Exit-ready means consolidated GAAP financials with clean intercompany eliminations, a documented and defensible list of add-backs, and a data room organized the way diligence teams expect to see it — ideally built months before a letter of intent, not during the 30-day scramble after one arrives.

Four Things Every Seller Needs Before Diligence Starts

Multi-entity GAAP consolidation

We net out intercompany loans, management fees, and shared-service allocations across every legal entity in your structure under US GAAP, so a buyer sees one clean combined picture instead of entity-level books that don't tie together.

Pre-sale quality-of-earnings prep

We run the same normalization a buyer's QoE firm will run - stripping one-time items, documenting add-backs, and stress-testing revenue and working-capital trends - before they find the gaps themselves.

Data room build

Financials, schedules, and support documents organized the way diligence teams expect, so the deal doesn't stall on requests for documentation that should have existed already.

Vendor & payment audit

A comprehensive review of vendor contracts and payment reconciliation that often surfaces real cost recovery before a sale - and removes leakage that would otherwise drag down EBITDA in front of a buyer.

The Add-Back Trap

Owners walk into a sale process with a mental list of "non-recurring" add-backs to boost EBITDA - and most of that list collapses under buyer scrutiny because it was never documented at the time the expense was incurred.

Undocumented add-backs get rejected

A buyer's QoE team won't take your word that an expense was one-time. Without contemporaneous support - an invoice, a board memo, a dated explanation - the adjustment gets thrown out and your effective multiple drops with it.

Related-party transactions aren't disclosed

Owner compensation above market, family on payroll, or below-market rent from a related entity all need to be identified and normalized - if a buyer finds them first instead of you disclosing them, it reads as a credibility problem, not just a numbers problem.

What it costs you: a re-traded purchase price after the letter of intent, a longer and more adversarial diligence period, or a buyer walking away entirely once trust in the numbers erodes.

Built From the Buy Side

Our partner closed the financial side of a $100M private equity acquisition spanning 6 legal entities and 20 operational locations, coordinating directly with the PE firm, legal counsel, and banking partners through the transaction lifecycle. We know exactly what a buyer's team tests for, because we've sat on that side of the table.

How We Engage

  • Consolidate financials across every legal entity under US GAAP, with clean intercompany eliminations
  • Build and document a defensible add-back schedule before a buyer's QoE team tests it
  • Run a vendor and payment audit to recover leakage that would otherwise depress EBITDA
  • Organize a clean, buyer-ready data room ahead of a letter of intent
  • Stay engaged through diligence as your accounting point of contact for the buyer's deal team

We work alongside your investment banker, M&A attorney, and the buyer's diligence team - we don't replace them, we make sure the numbers hold up under their scrutiny.

PE & Exit-Readiness FAQs

What does "exit-ready" actually mean?
Consolidated GAAP financials with clean intercompany eliminations, a documented and defensible add-back schedule, and a data room organized the way diligence teams expect - built months before a letter of intent, not scrambled together after one.
What is a quality of earnings review?
The buyer's independent test of whether your reported EBITDA reflects true, sustainable earnings - stripping one-time items, normalizing owner pay and related-party expenses, and checking revenue and working capital trends. A weak result is the most common reason deals get repriced after a letter of intent.
How do you consolidate financials across multiple entities?
We net out intercompany loans, management fees, and shared-service allocations across every entity under US GAAP, so the buyer sees one clean combined picture. We've done this directly on a $100M PE acquisition spanning 6 legal entities and 20 locations.
When should I start preparing, relative to when I plan to sell?
Ideally 6-18 months before a sale process starts. Add-backs need contemporaneous documentation, and consolidation issues take time to clean up - both are far harder to fix retroactively once a buyer's diligence team is already asking questions.

Don't Let Your Books Cost You the Multiple

A call covers where your structure and financials stand today, and what a buyer's diligence team will test first. No commitment.

[email protected] +1 (206) 209-8210