Coordinated Transaction Support for a Leading Private Educational Testing and Assessment Organization’s Global Acquisition

How EisnerAmper Guided a Leading Educational Testing Organization Through a Global Acquisition with Coordinated M&A Support

Client

One of the largest and leading private educational testing and assessment organizations set out to grow through acquisition. Organizations of this kind operate where accuracy and trust matter enormously, developing and administering the standardized tests and assessments that carry real weight for the people who take them.

To extend its reach and capabilities, the organization pursued a strategic acquisition on a global scale. A transaction of that size reaches into nearly every part of the finance function, from how the deal is priced to how the combined organization will report its results afterward. Leadership wanted the work done carefully and correctly the first time, so they brought in EisnerAmper for a full suite of mergers and acquisitions (M&A) support spanning due diligence, technical accounting, valuation, and post-close integration.

The Challenge

A large, global acquisition raises a long list of technical questions that all must be answered consistently and defensibly. The organization needed a clear, accurate picture of what it was buying, a sound basis for pricing the deal, and an accounting treatment that would hold up under the scrutiny of external auditors. It also had to bring the acquired entity onto its own accounting standards so the combined organization could report as one. Getting any of these pieces wrong can create real problems later, from restated figures to a difficult audit.

In addition to having a full picture of the acquisition, the organization wanted the transaction to advance its broader strategy rather than become a distraction from it. That called for a team that could handle the technical accounting and valuation work while keeping sight of the bigger picture.

Approach

EisnerAmper brought together a cross-service team that worked alongside the organization’s management from early due diligence through the opening balance sheet. Rather than handing the work off between separate groups, the due diligence, technical accounting, and valuation professionals moved through the transaction together.

Due Diligence and a Clear Financial Baseline

The engagement began by analyzing the target's working capital. This work established a normalized view of the target’s operating position and gave the organization a reliable financial baseline for the transaction, along with a clearer sense of exactly what it was acquiring.

a few business people standing in a hallway

Technical Accounting for the Combination

With that foundation in place, the technical accounting team worked closely with management to identify and document the accounting policy decisions that a business combination requires under the guidance in Accounting Standards Codification (ASC) 805. That work included determining the accounting acquirer, calculating the purchase consideration, and facilitating adjustments to the closing balance sheet. From there, the team developed a preliminary opening balance sheet that reflected the goodwill and intangible assets created by the deal.

To bring the acquired entity in line with the organization’s accounting standards, the team also facilitated the adoption of two significant US generally accepted accounting principles (GAAP) standards: revenue recognition under ASC 606 and lease accounting under ASC 842. Aligning both entities on the same standards let the combined organization report consistently from day one.

Valuation and Purchase Price Allocation

The valuation team then carried out a detailed analysis of the intangible assets that required recognition, work that fed directly into the purchase price allocation (PPA). Valuing the intangibles and allocating the purchase price correctly is what turns a signed deal into financial statements that auditors and readers can rely on, so this step gave the organization confidence that its reported numbers would stand up to review.

The Results

The organization came through its acquisition confident and that the deal was set up to support where it wanted to go.

Beyond the individual deliverables, the organization gained a shared understanding of its own transaction and a working relationship it could carry into the next phase. The result was a global acquisition that supported the organization’s strategy and positioned it well for what comes next. .

The cross-service team operated as a single, coordinated group, so due diligence, technical accounting, and valuation fit together instead of running in isolation.

Senior EisnerAmper professionals stayed hands-on throughout the engagement and kept the work aligned with the organization’s overall strategy.

The organization moved smoothly through its financial reporting and external audit, and its Big Four auditors were satisfied with the results.

On the strength of that experience, the organization engaged EisnerAmper again to support post-close integration.

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How EisnerAmper Can Help

Whether an organization is weighing its first acquisition or working through a complex, cross-border deal, EisnerAmper’s team supports the full transaction lifecycle, from due diligence and technical accounting to valuation, purchase price allocation, and post-close integration. To learn how the team can help with your next transaction, start a conversation through our contact form.