Stout provided buy-side due diligence support to a private equity firm purchasing its first platform roofing business. The business installs and repairs roofs in Alabama for consumers and insurance providers.

Our deliverables included the quality-of-earnings analysis and net working capital analysis. As the business operated on a cash basis of accounting, the key analysis related to the normalization of job-level revenue detail to align with the timing the work was performed.

Our analysis improved visibility into monthly results for the client and included a key adjustment in the quality of earnings, as many jobs received retention payments prior to work being performed. Other analysis included normalizations for rebates, insurance, and other one-time items.

Our team worked closely with the new private equity fund on its first platform in the roofing space.