February 17, 2017
By Larry Reinharz
One of the companies we sold last month was a $22MM distribution business generating $2.5MM of adjusted EBITDA; the company was flat, no real growth over the past several years.
Prior to hiring us the owner was trying to sell the company on his own; the buyer ultimately could not fund the deal they had negotiated, $8MM of cash with a $4MM 3 year earn out.
Once all of the materials were prepared we initiated our confidential global auction and obtained 329 interested buyers. From this pool we had 277 buyers sign confidentiality agreements and obtain the book and video. From this pool we obtained 29 offers for the company ranging from $8.3MM to $16.9MM, all varying terms and structure. We brought in the 12 strongest buyers for meetings and phone calls and ended up closing the deal for $16.25MM in cash with a strategic buyer.
The entire process took 153 days; so 5 months for us to double the amount of cash the owner realized from the sale of his business.