In recent years, Stout has seen sharp revenue growth, and last year was no exception. In 2018, Stout’s annual revenue increased by more than 14% to $135 million, a sign of the hard work and commitment of our professionals.
In September, Stout expanded its global footprint in Asia with three new offices. Based in Shanghai, Singapore, and Hong Kong, these new offices broaden our services in China, Singapore, and territories throughout Southeast Asia. In conjunction with this announcement, we also welcomed five new managing directors, each with more than 20 years’ experience in international mergers and acquisitions across numerous industry sectors.
In February, we expanded our Financial Sponsor Coverage practice in our Investment Banking group. Our dedicated Financial Sponsor Coverage team brings the full strength of Stout’s industry expertise to bear on behalf of the private equity community as we actively market deal flow and identify key portfolio transaction opportunities. Leading the team are two investment banking and private equity veterans, Stephanie Davies (left) and Blake Otté (right), with more than 30 years’ combined experience in mergers, acquisitions, reverse mergers, divestitures, equity and debt financings, special situations and distressed M&A, and business development/deal origination.
The Journal is a semiannual publication featuring leading insights from Stout's in-house experts. Each issue highlights a variety of topics across investment banking, valuation advisory, dispute consulting, and management consulting.
Based on Stout's extensive experience serving automotive industry clients, this report is packed with data and insights to help inform and shape future recall risk management strategies.
Our investment banking experts leverage their substantial industry knowledge to provide regular updates on recent trends and activity in the M&A and private equity markets.
We assist clients everywhere on the RC continuum: from ensuring systems function well, to addressing fissures in the RC, to aiding in structural rebuild and redesign to remedy large problems.
Score yourself against best practices and trends to ensure your department is ready to respond to litigation with the strongest balance of planning and execution as possible.
We utilize our extensive experience both inside and outside of the courtroom to research court cases and provide expert analyses on significant matters.
We regularly survey our clients about our efforts. Our net promoter score – an industry-standard measure of our clients’ willingness to recommend Stout’s services on a scale of -100 to +100 – is in the +90s, a sign of our clients’ trust and positive feedback.
“Great process. The team was engaged, exhibited great attention to detail, and identified key aspects of the transaction very quickly. I would highly recommend Stout to anyone seeking solvency opinions in the future.”
“[Stout delivered] exceptional responsiveness and subject matter expertise. [Your expert] did a wonderful job testifying. He handled the difficult questions well and was well-prepared.”
"[Stout's professionals] always do a great job of guiding us through the process and actually have inspired new ways of looking at our company that has been beneficial to us."
"[Your professionals] were responsive and client-directed. In every sense, they made the process easier. I thought Stout provided a very good level of service, and I would certainly use them again.”
“The Stout team is always willing to work with and talk through topics, approaches, and rationale. They always provide high-quality valuation reports and are easy to work with.”
“We have worked with the team at Stout for several years, and have found the engagements to be efficient, thorough, and high-quality. They are always willing to assist us in understanding industry trends and issues that may impact us, even outside of our engagement work.”
We have significant expertise providing services spanning a wide range of industries and practice areas. As always, we are honored to serve our clients for their most important and complex engagements.
We were hired to determine the fair market value of a biopharmaceutical company that focuses on the development of treatments for rare pediatric diseases. Our valuation report was used for internal planning purposes in connection with implementation of a potential long-term incentive plan. The company previously sold the rights of two drugs and had a third drug in Phase III clinical trials. The company received royalty payments and milestone payments for the two developed drugs that were contingent on several factors.
We utilized a discounted cash flow analysis for the valuation, but given the contingent payments, we also incorporated a Monte Carlo simulation that captured the specific parameters of the contingent payments. We also applied a discounted cash flow analysis to the Phase III trial drug, incorporating scenarios around the probability of a successful Phase III trial.
We perform goodwill and indefinite-lived intangible asset impairment testing annually for a publicly traded manufacturer of consumer and pet branded foods and beverages. Specifically, we determine the fair value of seven reporting units and nearly 20 indefinite-lived trade names and trademarks; management relies on our work to satisfy financial reporting requirements. We also assist management with various long-term planning and marketing strategies by performing multiple sensitivity analyses related to the impact on reporting unit and intangible asset value under different scenarios.
We advised a leading international provider and manager of alternative investment products in its acquisition of a leading supplier of aftermarket auto body parts in the U.S., with 25 locations across 14 states. Our client maintains considerable expertise in the industry having previously owned and grown several premier companies. This experience and knowledge will enable the auto body parts supplier to further establish itself as a leader in collision repair-parts distribution and service in North America.
We were engaged by a provider of one of the world’s most widely used corporate board portals. This portal is a secure software application used by board members, leadership teams, and administrative staff. We determined the fair value and fair market value of the hypothetical Class B common stock of the company on a nonmarketable, minority, per-share basis at a specified valuation date. The company authorized the issuance of shares of Class B common stock, but there were no fully vested shares of Class B common stock outstanding as of the valuation date.
For the purposes of this analysis, we assumed there was one share of hypothetical Class B common stock outstanding. The results of our analysis were used by the company for corporate planning purposes in connection with the company’s incentive compensation program. In addition, we determined the fair value and fair market value of the company’s equity on a pre- and post-modification basis as of a later valuation date.
We were engaged to assist to provide litigation support during a bankruptcy proceeding. Our client develops and manufactures geophones and related specialized seismic equipment to the companies that provide seismic data to the oil and gas industry. Our client had a long-term relationship with the debtor and sold several thousand geophones to the debtor under a lease-like financing arrangement.
Prior to the bankruptcy, our client agreed to forgive the debt in exchange for the debtor’s seismic data library. One of the key issues that was to be litigated was the value of the geophones and associated equipment. We co-wrote an expert report that was used to settle our client’s claim against the debtor.
We were retained to provide damages opinions in a trade secret misappropriation matter. The engagement involved a regional bank that was suing a team of former mortgage lender employees who left the bank to work for a national bank competitor. While employed at the original regional bank employer, this team had access to detailed confidential information about mortgage customers, including personal contact information, notes on customer preferences, and specific loan information. The former employees were accused of misappropriating this customer information as well as various proprietary forms from the original employer, taking that information to their new employer, and using that information to target some of those customers.
We prepared a damages analysis based on a reasonable royalty theory of recovery. A central part of that analysis was to analyze market rates for obtaining detailed prospective mortgage loan customer information, including consideration of lead-generation services and publicly available historical real estate loan information. Our work in this matter was complicated by the fact that we were retained two weeks before the report due date. Ultimately, we met the deadline for this project, and the case settled shortly after the submission of our expert report.
We were engaged to advise the board of directors of a $10 billion public company in the fast-food industry on an $825 million financing that the company was undertaking. The company’s goal was to redeem existing debt at favorable terms and fund capital returns to shareholders.
Our analysis relied on projected cash flows as well as trading multiples of comparable publicly traded companies and recent mergers and acquisitions of similar companies in order to assess the viability of the post-refinancing capital structure. In addition, we performed an analysis to determine the ability of the company to satisfy its post-refinancing debt obligations. Our work also included a sensitivity analysis in order to provide management with a sense of the company’s ability to continue satisfying debt obligations and operate the business without undue stress in the event of unexpected turbulence resulting in lower-than-expected future cash flows.
We issued an opinion that the company should remain solvent subsequent to the refinancing and return of $325 million of capital to shareholders. This enabled the board of directors to recommend the transaction with confidence, and the company subsequently undertook the deal successfully.
We were engaged by a long-standing publicly traded client in the specialty chemical manufacturing industry to help with the hedge accounting treatment of two foreign exchange swaps. We performed hedge effectiveness testing and assisted with the hedge documentation. In addition, we also performed the fair value analysis of the swaps, which incorporated a counterparty risk adjustment for satisfying financial reporting requirements.
We served as the exclusive financial advisor to a leading France-based company that specializes in the manufacturing and distribution of traditional dried charcuterie products and sausages. Stout advised the company in connection with its majority stake sale to a group of private equity investors.
We advised a privately owned operator of long-term acute-care (LTAC) hospitals and inpatient rehabilitation services through a complex restructuring process. We assisted the firm in determining which of its 14 LTAC hospitals were viable in the face of the reimbursement change and then launched a dual-track M&A and new money financing process. As a result of the transaction, the firm’s management was able to retain 100% ownership while debt and trade claims were reduced by 60%. In addition to the investment banking role, our operational restructuring team assisted the debtors throughout the process with cash flow reporting, claims and vendor management, and other ancillary services.
We were engaged by an owner of oil and gas mineral properties to provide multiple services in connection with a proposed acquisition of mineral interests in Oklahoma. We advised our client leading up to the transaction, determining the current fair market value for the interests as well as soliciting competing offers for the interests.
Over the course of a multiyear partnership, We have provided quarterly equity and incentive unit valuations for a leading, multi-billion-dollar recreational products company. Our engagement objectives have been multifaceted. First, certain incentive units granted to employees are recognized as liability awards, requiring recurring valuations to support the company’s financial reporting requirements. Second, our valuations are utilized by the board to determine participation thresholds at which new units are granted. Third, the board also relies on us to determine the value at which employees may redeem units in accordance with its incentive unit plan. Fourth, we prepare separate valuations for the company’s founder and primary shareholder to comply with federal gift tax requirements. Finally, we assist company management with its annual goodwill impairment tests for multiple reporting units.
We were engaged by a national senior retirement community-living company to determine the value of a newly acquired 284-unit continuing-care retirement resort. The land, buildings, and personal property were appraised for financial reporting purposes. The unique property included over 100 acres of land, nearly 400,000 square feet of buildings, including a two-story mansion built in 1922, and an extensive amount of furnishings including fully fitted living suites and site-integrated communication/alert systems.
We were retained to provide an appraisal of a property subject to a long-term ground lease for a partnership buyout. The offered sale price was based on a third-party appraisal obtained by the partners (buyers) that our client (seller) believed 1) to be below a reasonable market value conclusion and 2) overlooked a number of positive factors that are unique to the property. Given our expertise in valuing an array of property types, including ground-leased properties, we provided a detailed and well-supported valuation analysis. In determining an appropriate capitalization rate and discount rate for the valuation, we also considered many other factors in our valuation, including: the creditworthiness of the tenant; long remaining lease term; highly desirable location where new development is severely restrictive; and increasing percentage rent payments from the tenant. Our appraisal provided our client credible support for negotiating the transaction.
The ranks of our senior team continued to grow over the last 12 months as we strengthened our capabilities across the firm. We welcomed a number of Managing Directors and Directors to Stout, and also celebrated the well-deserved senior-level promotions within our organization. We now have more than 90 Managing Directors and more than 60 Directors serving clients at Stout.