Diligence · Home Services

Quality of Earnings for Home Services Independent Sponsors

Coordinating Quality of Earnings on home services deals, with the structure protection and capital connectivity an independent sponsor actually needs.

EV range $8M to $80M EV EBITDA $2M to $15M Audience Buy-side / Sponsor
The deal context

Every home services acquisition has its own gravity. Quality of Earnings is the workstream where independent sponsor counsel earns the seat.

The typical home services platform sits at $8M to $80M EV with EBITDA in the $2M to $15M range. The thesis runs on regional roll-ups of HVAC, plumbing, and electrical operators. The cleanest home services deals close in 60 days from LOI. The mess is almost always in the licenses, not the financials.

The moves

How Quality of Earnings actually gets structured.

  1. Engage QofE within five business days of LOI signing.

  2. Scope to include working capital normalization, deferred revenue, and customer concentration.

  3. Share preliminary findings with the seller before final report, to surface disputes early.

  4. Coordinate QofE findings into both the purchase agreement and the LP commitment package.

  5. In home services, layer in working capital peg that survives a slow February as part of the Quality of Earnings workstream.

The common mistake

Treating QofE as a back-office exercise. It is the basis for the price, the working capital peg, and the LP pitch.

Jason's take
"The QofE is the deal book. Read it twice before you negotiate anything."
Jason Powell · Quality of Earnings
Capital after close

The deal is one thing. The capital that opens up after close is another.

Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.

MONTH 18
Senior refi
MONTH 24
Dividend recap
MONTH 36
Growth equity
YEAR 4–5
Strategic exit
ENGAGE THE PRACTICE

Quality of Earnings for Home Services, on independent sponsor terms.

Independent sponsor counsel that already speaks fluent deal-by-deal economics, structures clean LPAs, and travels with capital markets relationships for what comes after close.