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

Our Financial Due Diligence (FDD) team performed a quality-of-earnings, net working capital, and net debt analysis to assist the company in assessing their initial valuation of the acquisition target. Our FDD team focused on analyzing normalized EBITDA, including historical job performance trends by customer type (general contractor vs. facility owner) and service type, identifying deviations from U.S. GAAP and potential implications to earnings, and headcount / employee compensation structure.

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