Enabling informed investment decisions through financial analysis and risk assessments

A private investor group approached Alehar to evaluate Haven, a rapidly expanding home‑healthcare company that was attracting attention for double‑digit top‑line growth. The investors wanted two deliverables. First, a disciplined valuation model that revealed whether Haven’s asking price could generate an acceptable return under realistic assumptions. Second, a clear risk assessment that would uncover any hidden liabilities or operational gaps before funds changed hands.

1. Reconstructing the financial story

We began by rebuilding three full fiscal years of profit‑and‑loss statements and cash‑flow data. This process involved reconciling revenue reported with cash actually collected, normalizing owner‑specific adjustments, and separating recurring operating costs from one‑off expenses. Using that cleaned data, we created several forecast scenarios that tested different growth trajectories, payer mixes, and reimbursement trends. Sector benchmarks provided context for gross‑margin targets, while sensitivity tables illustrated the impact of wage inflation and regulatory fee caps.

The outcome was a valuation band that quantified upside potential and downside exposure under base, best, and worst cases.

2. Focusing diligence on hidden risks

Financial strength alone could not guarantee a sound acquisition, so the investors asked us to probe operational risk. We prioritized three areas.

• Contract structures: A commercial review highlighted language in several payer agreements that allowed unilateral rate resets. We modeled the revenue hit if those resets were exercised.
• Regulatory compliance: Home‑health providers face strict state oversight. We sampled caregiver files to confirm licensure, background checks, and visit documentation. Gaps were minor but real; our report included a remediation plan.
• Caregiver turnover and staffing scalability: Using industry databases and Haven’s payroll records, we benchmarked turnover, overtime hours, and recruitment lead times. We then quantified the cost of maintaining staff levels as patient volume grew, ensuring the investors understood the working‑capital demands linked to labor.

3. Competitive landscape and scenario stress tests

Beyond internal risks, we mapped potential external threats. National franchises were entering adjacent states, telehealth platforms were beginning to integrate non‑skilled home care, and hospital systems were considering captive home‑care units. Each threat was translated into a revenue or margin pressure variable within our model, allowing the group to see how competitive headwinds could affect returns.

The group moved from initial interest to a signed purchase agreement with a clear understanding of value drivers, quantified downside risks, and an actionable post‑close plan.

Haven’s acquisition demonstrates how disciplined financial reconstruction, sector‑specific diligence, and structured scenario analysis can turn a promising but opaque target into a confident investment decision, even when advisory support is limited to a focused, time‑boxed project of approximately eight weeks.