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Retrospective Analysis

Air Pros USA

PE-backed HVAC roll-up. $250M+ debt, $25M EBITDA. Filed Chapter 11 March 2025, liquidated September 2025. Secured creditor recovery: 16–32 cents on the dollar. Equity recovery: zero.

$75M
P25 Valuation
$95M
Expected Value
$111M
P75 Valuation
Overview

This retrospective demonstrates what prospective diligence would have identified: integration velocity exceeding capacity by 4–8×, unsustainable capital structure at 10× leverage, and leadership transition during peak operational complexity.

The signals were visible two years before bankruptcy. The filings confirm the diagnosis, but prospective diligence would have reached the same conclusion.

Key Findings
Unsustainable Capital Structure
Leverage of ~10× EBITDA exceeded any defensible threshold for a services business. Industry norm: 3.5–5.0×. No margin for execution variance, no capacity for integration investment.
Integration Execution Failure
Twelve acquisitions in fifteen months against realistic integration capacity of two to three deals per year. Result: eleven separately operating brands with duplicated infrastructure.
Leadership Transition at Critical Juncture
Founder CEO transitioned to Chief Growth Officer during peak acquisition activity. Incoming CEO lacked institutional knowledge during the critical integration period.
Cash Flow Structural Impairment
Operating cash margin of 5.6% during distress indicates core operations remained viable. This was a capital structure problem, not a fundamental business model failure.
Methodology

Monte Carlo simulation with 10,000 iterations, correlated variables via Cholesky decomposition. Convergence verified at 5,000 iterations. DCF analysis with discrete scenario weighting. All findings sourced to court filings and public records.

Executive Summary
4-page analysis with valuation, findings, and signal detection matrix.
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