Success Story: Helping to Assess an Investment in a Fast-Casual Restaurant

The Client

A private equity and debt provider evaluating an investment in a fast-casual restaurant company

The Challenge

Provide comprehensive financial due diligence to assess store-level profitability and validate assumptions supporting growth strategy, valuation and debt covenants

The Process

Weaver’s Transaction Advisory Services team conducted a detailed quality of earnings analysis to support the client’s investment decision.

• Financial diligence: Analyzed the quality of earnings and net working capital, identifying and adjusting for nonrecurring items such as corporate-level costs and pre-opening expenses
• Profitability analysis: Evaluated store-level performance metrics and tested management’s assumptions for new store openings, maturity curves and profitability by location
• Valuation support: Provided the foundation for assessing enterprise value, supporting investment decisions and structuring debt agreements

The Deliverables

Weaver’s Transaction Advisory Services team delivered key insights to help the client make informed decisions throughout the investment process.

• Quality of earnings report: Delivered a clear view of the company’s normalized earnings by eliminating one-time and non-operational expenses
• Working capital analysis: Provided insights into operational cash flow needs and helped establish baseline targets for closing mechanisms
• Location profitability assessment: Offered a detailed review of unit economics to inform valuation and validate growth assumptions
• Debt covenant support: Equipped the client with accurate financial insights to negotiate appropriate financial terms and debt structure

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