Stout provided sell-side financial due diligence services to a leading distributor of construction products serving the Midwest and Southern United States markets. The owners attempted to divest the business multiple times over the past several years unsuccessfully, as buyers were not confident in the integrity of the company’s financial reports.

The Stout Financial Due Diligence team performed a comprehensive analysis, including quality-of-earnings and net-working-capital procedures. Stout’s analysis was heavily focused on understanding the target’s normalized EBITDA run rate, as the year-over-year trends fluctuated significantly due to market volatility in steel prices. Given the materiality, supplier rebates were also a significant focus for buyers.

Stout prepared a thorough analysis and supported the sellers by aiding buyers in understanding the financial analysis of the company. Overall, the analysis and information prepared by Stout led to an efficient buyer diligence process, which facilitated a faster closing and optimized deal value.