By the time she returns, I’m deep in her spreadsheets.
“You’re looking at the Lockhart acquisition scenarios.”
I nod, accepting the Americano and a breakfast burrito. “Excellent choice.” It’s spicy and enormous.
After trying to organize things, she frowns. “This might be easier in the conference room.”
“Agree.”
Within minutes, we’re relocated and settled.
She begins by clicking through her dashboard. It’s color-coded, annotated, structured with a precision that could only come from a brain that didn’t stop at midnight.
“I ran the financials based on several integration models.” She taps a few keys. “Best-case, moderate, and underperforming scenarios.”
I nod, watching the graphs flicker.
“But something’s off.”
I angle closer. “Define off.”
“I built out cost synergies assuming standard vertical integration—shared ops, merged HR, marketing alignment, and tech platforms. On paper, we should gain economies of scale within eighteen months.”
She flicks to another tab. “But when you apply Lockhart’s Q3 trailing twelve-months against our EBITDA margins, the lift isn’t there. Not even in the moderate scenario.”
“Which means?”
“It means the deal’s not just underwhelming—it’s potentially catastrophic if their projected cash flow is exaggerated.”
My blood ices.
“Walk me through it.”
Her voice tightens. “They’ve overstated asset performance. The depreciation on their mid-tier properties is buried in non-operating expenses. And their liquidity ratios are artificially boosted by short-term vendor deferrals. It’s window dressing, Xavier. They’re masking a cash flow problem. A big one.”
Fuck.
“Are you sure?” I ask, already knowing the answer.
“I triple-checked. Even adjusted for seasonality, the numbers don’t align. I ran Monte Carlo simulations based on volatility bands from their last five quarterly earnings. Unless we see significant outperformance from their top-performing assets or an injection of new capital, we’re looking at negative ROI for at least three fiscal quarters. Maybe more.”
I scrub my hand down my face. “What about their luxury holdings? Isn’t that where the real value is supposed to come from?”
She hesitates. “That’s the other problem.”
“Jesus Christ, don’t tell me.”
“They’re overleveraged. The Flagstone project in Montecito? They’re financing it at prime plus four, and the occupancy rate isn’t breaking fifty-eight percent. Their burn rate exceeds forecast by ten percent quarter over quarter.”
“So we’re buying a gilded albatross.”
She flinches. “If the acquisition goes through without adjustments to valuation or contingencies, yes.”
I lean back in my chair, staring at her like I’ve never seen her before. She just unearthed what months of due diligence missed.
“You were right,” I say quietly. “Back then. About the numbers.”
Her lashes flutter, and for a moment, I see the ghost of that intern in the boardroom again. Brave. Brilliant. Betrayed.