Transaction Advisory

Specializing in QoE for SaaS and Software Companies

The caliber of Quality of Earnings (“QoE”) deliverables differs greatly from provider to provider.  Maxwell Locke & Ritter believes our collaborative approach and deliverable are far superior in helping our clients achieve a better understanding of the target’s historical trends and the true value of the business. Our unique approach includes:

  • Insightful, tailored deliverables, including charts and visual key observations to help clients focus on what is truly important.
  • SaaS & services focused analyses and expertise; not a cookie-cutter approach.
  • Full drill-down capability to transaction-level detail; easy-to-follow databooks to plug into projection models.
  • Integrated tax observations, including U.S. federal, state and local income tax plus sales tax exposure analysis.
  • Net working capital and indebtedness calculation advice, including consultation on SPA language to mitigate potential post-transaction disputes.

We treat every deal as if we were making the investment. We know that every deal is unique, and we value the trust our clients place in us to be their QoE service provider.

See the ML&R Difference in Our Sample Redacted Report

Diverse Team Experience

The transaction advisory team at Maxwell Locke & Ritter has diverse backgrounds in private equity investments, investment banking, national firm public accounting, and private company ownership. Our team has performed hundreds of QoE engagements on SaaS and other recurring revenue companies throughout the US, Canada and EMEA and serve private equity groups, lenders, family offices, and corporate entities on both buy-side and sell-side transactions. With our broad range of experience, we offer insight into quantitative accounting practices, as well as qualitative strengths and weaknesses for each target.

We deliver a client­-focused approach to financial due diligence that mitigates risk and identifies key value drivers while avoiding conflicts of interest. Our tax and audit departments complement our dedicated transaction advisory services team. We have the flexibility to tailor the QoE deliverable to meet your specific needs. Please reach out to let us know how we can help you.

Transaction Advisory Services Graphic

Transaction advisory services offered:
  • Adjusted MRR & CMRR
  • Quality of earnings and adjusted P&L analysis
  • Proof of Cash analysis
  • Working capital analysis
  • Tax analysis – sales tax and income tax
Types of clients served:
  • Private equity groups
  • Lenders
  • Family offices
  • Corporate acquirers
Types of transactions:
  • Acquisitions
  • Recapitalizations
  • Loan financing
  • Sell side
Target geographies served:
  • United States
  • Canada
  • EMEA

The ML&R team has developed a deep understanding of key analyses that are critical considerations to valuation and long-term viability of SaaS companies. We refer to this as the Four Pillars of ML&R SaaS QoE.

Maxwell Locke & Ritter’s QoE scope includes the following analyses:

Revenue analysis:
  • Adjusted MRR and CMRR
  • MRR momentum
  • New, upsells, downsells, and customer churn
  • ASC 606 revenue recognition for implementation, one-time, and recurring revenue
P&L analysis:
  • LTV / CAC
  • COGS headcount and expense allocation
  • Gross margin trends
  • Key drivers, EBITDA bridge, and adjusted P&L trends
  • ASC 340 expense recognition for commissions and other contract costs
  • Proof of cash

Financial Transaction Advisory

Balance sheet analysis:
  • Deferred revenue
  • Debt & debt-like items
  • Net working capital
  • AR & AP aging
  • Inventory analysis
  • Accruals
  • Capitalized software and other capex
  • Accounting procedures and controls
  • Related party adjustments
Tax analysis:
  • Federal income tax
  • State and local income tax
  • Sales and use tax liabilities
  • Payroll tax

For experienced assistance with financial transaction advisory in these service areas, please contact us today to schedule a consultation. We look forward to helping you make financial decisions with confidence.

Four Pillars of ML&R SaaS QoE


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