Buyer and Math Question

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from University of Virginia-Darden - Darden School of Business
in Richmond, VA, USA

2yrs ago

Buyer and Math Question

So I saw a business in a tangential industry to my own company is in. The adjusted “EBITDA” for 2019 through 2023 was $233k, $88k, $496k, $1450k, $1,500k. That’s a mean of $753k and a standard deviation of $603k. The business was hollowed out during the pandemic. And they told me they can’t get me numbers from beforeredactedI reluctantly made an offer. They were insulted and said that they have standing offers of $5-$6MM. That’s a 7.3x EBITDA multiple if the price is $5.5MM.

So my question is two fold:
1) If you have a 7.3x EBITDA offer on a business that has a standard deviation as a percentage of EBITDA at 80% in a basic project based non high growth industry why on earth would you not sell that tomorrow?
2) Who would pay that for a corporate vents company?

Looking for perspectives on this.

1 Like

568 Views

reply by a searcher 2yrs ago
from Harvard University in Philadelphia, PA, USA

On the second part, there could be many reasons someone would pay that. Maybe the buyer sees a way to quickly realize significant revenue and/or cost synergies. Or perhaps the seller is exaggerating their existing offers.

reply by an intermediary 2yrs ago
from Southern Methodist University in Fort Lauderdale, FL, USA

"First you need to understand the growth catalysts for 2022 and 2023 and whether or not that EBITDA seems reasonably sustainable."

Agree with this. I'd be curious to know how they got from theirredactedpre-COVID) numbers to what they did the last two years. Did they win a bunch of new business? Is that sustainable going forward?