Success Story: Delivering GAAP Compliance and Value to Uplift a Strategic Transaction

The Client

A privately held water sourcing company preparing for sale to a larger industry competitor.

The Challenge

The company had always maintained its books on a tax basis, focusing primarily on minimizing taxable income. While this approach worked for annual filings, it did not reflect the company’s true economic performance. The potential buyer required financial statements prepared under generally accepted accounting principles (GAAP), which provide a standardized view of revenues, expenses and asset values. Without GAAP-compliant records, the buyer could not properly assess profitability or cash flow, and due diligence came to a halt.

The Process

Weaver’s transaction advisory and accounting teams worked closely with management to restate seven years of historical financial data from tax basis to GAAP. During the conversion, the team:

• Reclassified fixed assets that had been improperly expensed under tax accounting rules, increasing the value of long-term assets and reducing expenses
• Adjusted revenue recognition to align with GAAP’s matching principles, showing a more accurate pattern of earned income
• Corrected lease accounting and other balance sheet items to ensure full transparency and comparability

These adjustments gave potential buyers a clearer, more accurate view of the company’s operational performance and future earning capacity.

The Deliverables

The company emerged with a complete set of GAAP-compliant financial statements that reflected the true strength of its business. EBITDA increased by more than 2.5 times, translating into nearly a $55 million increase in the purchase price. The client completed the sale at a significantly higher valuation and credited Weaver’s work as a key factor in achieving a successful outcome.

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