Sell-side QoE to validate carve-out financials
December 17, 2025
by a searcher from The University of Chicago - Booth School of Business in California, USA
I'm working on a carve-out deal where the viability depends on the validity of the management prepared carve-out financials. It's modest sized and self-funded, and lenders so far have indicated that QoE would be required on their end (and not CPA review) and of course I would want QoE for my own peace of mind. I wish they would have had an accountant prepare this before bringing to market, but here we are. The current negotiated deal is on the edge of lending standards, so if there is an issue that causes a need to renegotiate or halt, I'd like to uncover that now.
To that end, I am thinking of splitting this up into two phases: (1) request a seller-paid deliverable which is focused on the carve out income statement to get to a viable restatement based on standalone economics; followed by (2) a buyer-paid portion with balance of deliverables that would be expected regardless of being a carve-out.
To be clear- I understand that a buyer-paid QoE is absolutely key to protecting my interests, and have no intent to trust sell-side QoE. I have decent financial acumen and have reasonable confidence I could identify major anomalies if the QoE was biased.
Has anyone done something similar? Is this a viable construct? The seller via the broker has expressed willingness to co-invest in a single vendor of my selection, though I'm not sure if that creates any conflicts of interest or other issues?
Thank you!
from Stanford University in Healdsburg, CA 95448, USA
from Liberty University in Fort Myers, Florida, United States