supplier of locally-sourced raw honey across the US

The Company (Target) is a leading supplier of locally sourced raw honey to national and regional grocery retail chains and retail grocery club chains throughout the US.

The Company offers 23 different honey varieties and generates roughly $50M in revenue with strong growth projections.

The potential Buyer was a private equity firm focused on investing in middle-market food, beverage, and ingredient companies.

FDP was engaged to perform a limited, high-level review of Target's quality of earnings report, confidential information memorandum, and data room information, identifying any preliminary accounting issues or risk areas requiring further consideration and analysis.

FDP read and analyzed the external accountant's and auditor's reports for the previous five years, including management letters and past adjustment schedules, to determine if there were any additional potential adjustments to EBITDA.

FDP also analyzed management's EBITDA add-backs and determined that roughly $800 thousand (approximately 10% of EBITDA) were recurring expenses and should be removed from adjusted EBITDA.

We assisted the Buyer with determining the Working Capital target to establish as part of the Asset Purchase Agreement and offer.

Based on FDP's findings while performing the transaction due diligence, the Buyer proposed an aggressive purchase price in line with realistic EBITDA expectations.

Other parties aggressively pursued the transaction, and ultimately, our client did not provide the highest price for Target.

While the transaction was not consummated, the private equity firm avoided potentially overpaying to acquire Target.