Institutional Underwriting. Computational Speed.

The definitive Pre-LOI diligence infrastructure for the lower-middle market. Ingest raw data rooms to algorithmically spread financials, normalize EBITDA, and stress-test debt capacity—securing deal architecture before you issue the term sheet.

Single-Transaction License. $3,000 per analysis.

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Brokers: download the partnership kit.

Report Coverage

The Definitive Pre-LOI Data Pack

Every Northscope analysis programmatically executes the core pillars of institutional due diligence in minutes, delivering a mathematically defensible transaction blueprint.

Financial Spreading & Preliminary QoE

We don’t just accept the seller’s numbers; we forensically reconstruct them.

  • EBITDA Normalization: Algorithmically strips out aggressive seller add-backs, one-time expenses, and above-market owner compensation to calculate the True Adjusted EBITDA.
  • Proof of Cash & Reconciliation: Flags discrepancies between internally prepared P&Ls, tax returns, and raw bank data.
  • Net Working Capital (NWC) Pegging: Identifies working capital requirements and seasonal fluctuations to prevent Day-1 undercapitalization.

Commercial & Operational Diligence

We map the structural risks that destroy enterprise value post-close.

  • Concentration Haircuts: Quantifies top-customer revenue concentration and algorithmically applies valuation penalties.
  • CapEx & Maintenance Forecasting: Identifies deferred maintenance and plots forward-looking capital expenditure liabilities.
  • Margin & Trend Analysis: Maps YoY revenue growth, gross margin degradation, and operating expense bloat.

Real Estate & Portfolio Mechanics

We underwrite the physical assets with the same rigor as the operating business.

  • FMV Intercompany Rent Normalization: Prevents sellers from “double-dipping” by normalizing above/below-market rent between the operating entity and the holding company.
  • Cap Rate & Asset Valuation: Calculates true Net Operating Income (NOI), Gross Rent Multipliers (GRM), and geographic Cap Rate adjustments across 1:N multi-property portfolios.

Capital Structure & Bankability

We prove the deal works for the lender and the equity sponsors.

  • DSCR Stress Testing: Models standard commercial loan amortization to verify the Debt Service Coverage Ratio (DSCR) clears banking minimums.
  • Cash-on-Cash Modeling: Calculates day-one equity requirements, LTV ratios, and projected cash-on-cash returns.

The Execution Weapons (LOI & RFI)

We hand you the exact artifacts needed to execute the transaction.

  • Targeted Deal Architecture: Calculates the precise Target Price, Opening Offer, Seller Note structure, and required Cash-at-Close.
  • Phase II RFI: Compiles a line-item Request for Information (RFI) demanding the exact missing general ledgers and documentation gaps identified in the data room.

Deploy Advisory Capital with Certainty.

In the lower-middle market, preliminary diligence is a latency bottleneck. Northscope eliminates the lag between the broker’s pitch and the term sheet. By algorithmically executing the preliminary Quality of Earnings, DSCR stress tests, and working capital pegging, we arm deal teams with mathematical certainty in minutes.

Triage deals at scale, and deploy your CPA and legal counsel only when the unit economics are proven.

The Underwriting Pipeline

Four computational phases. One data room drop.

Each phase executes programmatically. No analyst queue. No engagement letter.

I

Financial Spreading & Proof of Cash

Programmatic reconciliation of internal P&Ls against tax returns and raw bank data to establish an undeniable factual baseline.

II

EBITDA Normalization & WALT

Algorithmic rejection of aggressive seller add-backs, Fair Market Value (FMV) rent normalization, and quantitative lease rollover (WALT) analysis.

III

Debt Capacity & CapEx Mapping

Commercial loan amortization modeling to sensitize Debt Service Coverage Ratios (DSCR), paired with 36-month forward capital expenditure forecasting.

IV

Deal Architecture & Execution

Automated generation of definitive LOI financial clauses and a targeted, line-item Phase II Request for Information (RFI) to address identified data gaps.

Deal Execution Architecture

From diligence to term sheet in one pass

Every finding is translated into a specific dollar adjustment, protection mechanism, or verification priority. The output is a negotiation-ready package, not a memo to file.

Negotiation Anchors

Downside, base, and upside ranges with explicit assumptions. Target pricing, opening offer, and walk-away threshold calibrated to the risk profile.

Deal Structure Recommendations

Holdback percentages, earnout triggers, escrow mechanisms, and rollover equity structures generated from the risk findings. Ready for LOI insertion.

Targeted Phase II RFI

A ranked Request for Information that asks only for what changes the valuation. Eliminates wasted diligence cycles and keeps the broker aligned.

Deal Coverage

Three deal types. One rigorous process.

The pipeline classifies each transaction and deploys the appropriate analytical framework. Business, property, or hybrid.

Business Acquisition

Quality of earnings, EBITDA normalization bridge, working capital peg, customer concentration haircuts, owner comp adjustments, and multi-scenario valuation with industry-calibrated multiples.

Restaurants, agencies, e-commerce, SaaS, manufacturing, franchises, home services, and more.

Investment Property

NOI verification, WALT lease rollover analysis, expense ratio benchmarking, cap rate stress testing, DSCR bankability, deferred maintenance quantification, and cash-on-cash return scenarios.

Multifamily, commercial, mixed-use, industrial, and short-term rental.

Business with Real Estate

When the deal includes both a business and the property it operates from, we separate business goodwill from real estate value, normalize FMV rent to prevent double-dip manipulation, and produce a combined valuation with independent risk profiles for each component.

Laundromats with the building, restaurants with the real estate, storage facilities, and more.

Adversarial Methodology

Multi-Framework Computational Diligence

Every transaction is stress-tested by four independent analytical frameworks executing in parallel: financial integrity, risk exposure, commercial viability, and structural analysis. Each produces an independent assessment, then faces systematic adversarial challenge from the others.

Findings that survive cross-examination are included. Findings that don't are discarded. Every risk in your diligence pack has been computationally pressure-tested from four angles before you see it.

The output is not a narrative opinion. It is a deterministic, math-first underwriting with explicit dollar implications, scenario ranges, and a structured path to close.

The Diligence Pack

What you receive

Everything your IC memo needs. One data room. One computational pass.

Financial Spreading & Proof of Cash

Programmatic spreading of P&Ls, balance sheets, and tax returns with cross-document reconciliation and variance flags.

EBITDA Normalization Bridge

Deterministic walk-down from reported earnings to Adjusted EBITDA. Owner comp, FMV rent, franchise royalties, and aggressive add-backs stripped programmatically.

Scenario-Based Valuation

Downside, base, and upside ranges with labeled assumptions. Includes EBITDA-multiple, cap-rate, and combined business + property scenarios.

DSCR Bankability Stress Test

Commercial loan amortization across multiple rate scenarios. Instant read on debt capacity and lender covenants before you approach the bank.

LOI Financial Terms & Phase II RFI

Structured Letter of Intent clauses and a targeted Request for Information that closes the execution loop with the broker.

1:N Multi-Property Portfolio Analysis

Aggregate NOI, unit-level rent rolls, and portfolio-weighted cap rates for multi-site deals. Each property individually assessed, then consolidated.

Sample Output

See the Report

Every Northscope analysis follows the same rigorous structure. Review a sample report to see exactly what you'll receive.

Business Acquisition Investment Property Business with Real Estate

Sample uses redacted data from a completed analysis.

Execution

Data room to diligence pack

No calls. No engagement letters. No waiting for an analyst to build the model.

1

Drop the CIM, financials, tax returns, and deal details into the secure intake. The system accepts PDFs, spreadsheets, and scanned documents.

2

Four independent analytical frameworks execute in parallel: financial spreading, risk mapping, commercial viability, and structural analysis. Each finding is adversarially challenged before inclusion.

3

Receive the complete diligence pack by email: risk report, EBITDA bridge, valuation scenarios, LOI terms, Phase II RFI, and deal structure recommendations.

Built For

Who uses Northscope

From first-time searchers to experienced operators. If you're pricing a deal in the lower middle market, this is for you.

Search Funds & Self-Funded Searchers

You're reviewing 30 CIMs a quarter. Northscope gives you the pre-LOI diligence to kill bad deals fast and sharpen your IOI on the ones that survive. Stop paying a junior analyst $15K per preliminary QoE on deals that die in week two.

Independent Sponsors

You need to present defensible math to your capital partners before they commit. Northscope delivers the EBITDA bridge, risk map, and valuation scenarios your IC memo requires—without the 3-week engagement timeline.

Private Equity (Lower Middle Market)

Run Northscope as the first pass on platform and add-on targets. Programmatic financial spreading, concentration analysis, and DSCR stress tests let your deal team focus on thesis validation instead of spreadsheet construction.

Property Investors

Evaluating income properties: multifamily, mixed-use, or commercial. Northscope verifies NOI, runs WALT lease rollover analysis, stress-tests cap rates and DSCR across rate scenarios, and quantifies deferred maintenance before you commit capital.

Brokers & Intermediaries

Get both sides aligned on risk before the deal stalls. Independent analysis that either validates the asking price or identifies exactly what needs to be bridged—with specific dollar adjustments and a targeted RFI that keeps the transaction moving.

Sellers & Owner-Operators

See exactly how your deal looks from the buy side before you go to market. Address documentation gaps and valuation objections before they become re-trades. Defend fair value with data, not negotiation.

Common Questions

Questions

  • What goes into the data room drop?
    Tax returns (2–3 years), profit & loss statements, balance sheets, the CIM, and any material contracts (lease, supplier, customer). Rent rolls and operating statements for property deals. More complete documentation produces more definitive analysis—we'll flag every gap and generate a targeted RFI for what to request from the seller.
  • What if the seller's data room is incomplete?
    We analyze what's available, explicitly quantify the impact of each missing item on the valuation, and generate a Phase II RFI prioritized by what actually changes the deal. Incomplete documentation is itself a finding—and often the most important one.
  • How is this different from a preliminary QoE?
    A preliminary QoE typically costs $10–20K and takes 2–4 weeks. Northscope delivers the same pre-LOI outputs—EBITDA normalization bridge, risk flags, and valuation scenarios—in under an hour for $3,000. You still hire your QoE firm for final verification before closing, but only after the deal architecture is locked.
  • Will this slow the deal?
    The opposite. Results are delivered in under an hour. The output is designed to accelerate deal execution by giving you defensible numbers for the LOI and a targeted RFI that keeps the broker aligned instead of generating open-ended diligence requests.
  • Do I still need a CPA and attorney?
    Yes—for final verification before closing. Northscope owns the pre-LOI phase. We tell your CPA and attorney exactly where to focus, so you spend advisory fees on confirmed risks instead of reviewing everything from scratch.
  • How long does the analysis take?
    Typically under an hour once documents are uploaded. You'll receive the complete diligence pack by email as a PDF. Complex analyses with extensive documentation may take longer.
  • What deal sizes is this built for?
    Lower middle market: $500K to $25M enterprise value. Businesses, investment properties, and businesses with real estate. The pipeline classifies each transaction and deploys the appropriate analytical framework.
  • How do you handle confidentiality?
    Documents are transmitted via encrypted upload and processed on access-controlled infrastructure. The analysis is independent and never shared with third parties.
  • What about deals that include both a business and property?
    Yes. When the acquisition includes both an operating business and the real estate it occupies, we run both business and property frameworks in parallel, separate goodwill from real estate value, normalize FMV rent to prevent valuation manipulation, and produce a combined valuation with independent risk profiles for each component.
  • Can I use this for portfolio acquisitions?
    Yes. The 1:N portfolio engine aggregates NOI, unit-level rent rolls, and cap rates across multiple properties in a single analysis. Each property is individually assessed, then consolidated into a portfolio-level view with weighted metrics.

Pricing

Single-Transaction License

$3,000

Comprehensive Pre-LOI data pack. Delivered securely as a 30-page institutional brief.

  • Programmatic Financial Spreading & Proof of Cash
  • EBITDA Normalization Bridge
  • 1:N Multi-Property Portfolio Analysis
  • DSCR Bankability Stress Test
  • Structured LOI Clauses & Phase II RFI
  • 30+ page institutional brief, delivered securely