Stout provided buy-side financial due diligence services for a provider of interior and exterior facility operations, maintenance, and repair services. The acquisition target was a provider of facility and construction services that operated in the Midwest and expanded the company’s service offering.

Our Financial Due Diligence (FDD) team performed a quality-of-earnings, service line and job performance, net working capital, and net debt analysis to assist the company in assessing its initial valuation of the acquisition target. Our FDD team focused on normalized EBITDA, including adjustments for a percentage of completion lookback normalization, run-rate impact of recently awarded contracts, out-of-period and non-recurring adjustments, and headcount / employee compensation cost dynamics.

Additionally, we assisted with the determination of the working capital target and performed a proof of cash bank statement reconciliation exercise to agree the financial statements to a third-party source, as the acquisition target’s financial statements were not audited.