Section 5.8 · weights from configuration
Acquisition quality score
Eleven weighted components summing to 100. Each component states the evidence behind it and what would move it. Nothing here is a black box number.
72 of 100 · band GOOD
Bands: 0 to 39 weak · 40 to 59 marginal · 60 to 74 good · 75 to 84 strong · 85 to 100 exceptional. The band is descriptive. It does not itself pass or fail anything, and it never overrides the return hurdles.
Component breakdown
| Component | Weight | Score | Level | Evidence | What moves it |
|---|---|---|---|---|---|
| Financial quality | 15 | 12 | Strong | Normalised margin 14.2%, improving in each of three years. Filed accounts on time for six years. | Current-year management accounts confirming the margin holds |
| EBITDA growth | 15 | 13 | Strong | Reported EBITDA CAGR 15.28% over three years, consistent year on year, ahead of revenue growth of 9.92%. | Nothing outstanding. Highest scoring component. |
| Recurring revenue | 10 | 7 | Capped | 68% contracted. Capped at 7 because the contract expiry ladder is not disclosed. | Expiry schedule by month would release the cap |
| Cash conversion | 10 | 7 | Adequate | FCF over EBITDA 63.2%. Solid, held back by 55.6 debtor days. | Evidence of collections discipline or a debtor ageing report |
| Customer diversification | 10 | 7 | Adequate | Largest 18.4%, top five 46.1%. Inside mandate tolerance, close to the 20% warning. | Winning work outside the top five, or a longer term on Customer A |
| Owner independence | 10 | 6 | Weak | Classified MODERATE. Owner leads all tender submissions and is named on four of the top ten contracts. | A named successor for tendering, or a handover plan with dates |
| Management quality | 10 | 7 | Adequate | Eight sub-dimensions, detailed below. Operations manager with six years tenure carries the depot. | Evidence of a management team below the owner in sales |
| Capital efficiency | 5 | 4 | Strong | Maintenance capex 10.7% of EBITDA, no freehold, no growth capex assumed. | A fleet replacement schedule would confirm the capex run rate |
| Competitive position | 5 | 3 | Adequate | Switching costs moderate through TUPE and site knowledge. Tender exposure is real. No pricing power evidenced. | Win rate on retenders over three years |
| Growth opportunities | 5 | 3 | Adequate | Two evidenced: adjacent M&E scope on existing sites, and a pricing review not carried out since 2023. | Any evidenced pipeline. Seller assertions do not score. |
| Overall risk | 5 | 3 | Weak | Risk register carries two high-severity entries: owner-led tendering and working capital sensitivity. | Mitigation on either high-severity risk |
| Total | 100 | 72 | Good |
Scores are integers. A component with no evidence scores zero and says so, rather than defaulting to a midpoint that flatters the total.
Management quality, eight sub-dimensions
| Sub-dimension | Finding | of 10 |
|---|---|---|
| Depth below the owner | Operations manager and two supervisors | 7 |
| Tenure and stability | Ops manager 6 years, supervisors 4 and 3 years | 8 |
| Succession readiness | No named successor for tendering | 4 |
| Documented processes | Method statements and RAMS in place, sales process undocumented | 6 |
| Systems and reporting | Job management system in use, monthly management accounts produced | 8 |
| Staff turnover | Operational turnover 22%, normal for the sector | 7 |
| Customer relationship ownership | Split between owner and ops manager | 6 |
| Willingness to stay through handover | Seller indicates 6 months, unconfirmed in writing | 7 |
| Mean | Scaled to the 10 point component weight | 6.6 → 7 |
Sensitivity of the score
What the total becomes if a single open item resolves. Shown so the operator knows which question is worth asking first.
| If this resolves favourably | Score | Change |
|---|---|---|
| Contract expiry ladder disclosed and healthy | 75 | +3 |
| Named successor for tendering | 75 | +3 |
| Both of the above | 78 | +6 |
| Debtor ageing clean, collections evidenced | 74 | +2 |
| Retender win rate above 80% | 73 | +1 |
A score of 78 does not change the recommendation. The binding constraint is the 25% base IRR hurdle, not the score. See screening for the order in which the checks run.
Risk register roll-up
| Risk | Severity | Likelihood | Mitigation available | Feeds |
|---|---|---|---|---|
| Owner leads all tender submissions | High | Certain on exit | Hire or promote a bid lead before completion | Owner independence, overall risk |
| Working capital sensitivity to debtor days | High | Moderate | Working capital facility sized at £200,000 | Overall risk, stress tests |
| Customer A at 18.4% with 19 months remaining | Medium | Low in year one | Early retender engagement | Customer diversification |
| Depot lease break at year three | Medium | Low | Negotiate a longer term at completion | Overall risk |
| Dilapidations exposure unquantified | Medium | Unknown | Commission a survey in diligence | Enterprise value bridge |
| Sector wage inflation on an operational headcount of 48 | Medium | Moderate | Contractual indexation on renewal | Forecast downside case |
Every register entry names where it lands in the model. A risk that feeds nothing is a risk nobody priced.
AcquiScope produces analysis and modelling, not regulated investment advice. Scores shown are illustrative output for an invented business and do not constitute an assessment of any real company.