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Case History: Valuation Validation for Acquisition

Trucking and Logistics:
Poultry Trucking Company

Canton, Georgia

Fortis was engaged to provide a cash flow-based valuation analysis of a trucking company being considered for acquisition and merger by a private buyer with industry experience.

Situation

A Fortis client, an experienced owner-operator in the transportation sector, was evaluating the acquisition and merger of a poultry-focused trucking company into their existing operation. A prior valuation, produced by a nationally recognized firm, supported a transaction aimed at private equity sponsorship. However, the valuation appeared to be engineered for a roll-up thesis, one that assumed access to institutional capital, back-office synergies, and scaled economics that simply didn't exist for individual buyers. The model glossed over cash flow constraints and debt obligations, making the valuation look plausible on paper but unfinancable in practice for non-sponsored acquirers. Fortis was brought in to pressure test the assumptions and recalibrate the deal to something grounded in operating and lending reality.

Objective

The objective was to determine whether the business could support a realistic acquisition by experienced private buyers without relying on assumptions more suitable for a private equity roll-up. Fortis was engaged to validate the prior valuation through a cash flow-driven lens, focusing on the company's ability to meet debt obligations post-transaction. This meant evaluating the actual free cash flow available after accounting for capital expenditures, existing financing obligations, and a prospective acquisition loan. Rather than rely on generalized valuation multiples or synergy assumptions, Fortis built a pragmatic model designed to reflect lending realities and operating constraints, ultimately identifying an acquisition price that could be supported by the business itself and defended in front of lenders.

Results​​​

Fortis rebuilt the valuation using conservative, acquisition-focused assumptions, removing speculative synergies and adjusting growth, pricing, fuel projections to reflect current market realities.

A revised model focused on available free cash flow after CapEx and existing debt, identifying the true debt-carrying capacity of the business.

The proposed deal structure targeted a 1.28x debt service coverage ratio, staying within lender expectations while protecting future operational flexibility.

Fortis provided a bankable acquisition price that accounted for both current debt obligations and the cost of an acquisition loan, guiding the buyer away from overpayment.

The seller ultimately returned to the buyer with a price offer closer to Fortis's valuation, after rejecting the timeline and structure proposed by a private equity group, validating Fortis's disciplined approach.

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