Stout provided buy-side financial and tax due diligence services for a private equity firm acquiring a residential landscape design / build and maintenance services.

Our Financial Due Diligence (FDD) team performed a quality-of-earnings, net working capital, and net debt analysis while working closely with the private equity firm. Our FDD team focused on analyzing normalized EBITDA, including a percentage of completion lookback / hindsight normalization analysis, assessing inventory costing / valuation policies, identifying deviations from U.S. GAAP and potential implications to earnings, and examining headcount by department and employee compensation structures.

In conjunction with our quality-of-earnings analysis, our FDD team created a jobs database in order to analyze and explain historical revenue, margin, and backlog trends by service line, job size, and cohort/start year, as well as to assist our client in developing its forecast model. We also assisted with the determination of the working capital target and preparation of various purchase agreement disclosure schedules.

Additionally, our Tax Due Diligence team performed comprehensive tax due diligence on income, sales, payroll, and property taxes, including tax basis step-up analysis.