Does anyone have experience talking to owners of $100M companies?

June 22, 2023
by a searcher from Oregon State University in San Francisco, CA, USA
Got on the phone with a larger competitor this morning, he's 80 and is interested in selling.
He said he'll hand over the P&L and the let bank talk to CPA, but doesn't want to jump over a lot of hoops with diligence matters. It's his way or the highway. I know the space pretty well, have talked to his ex-employees and its a decent company. What would you guys do in this situation? Company make 50M in revenue, makes about 10M in EBIDTA and he wants to sell for about $100M. I know the space extensively know, having done diligence on it for over one year.
Should I raise all private capital for this type of deal, then consider doing leverage afterwards?
from Harvard University in 2003
from University of Illinois at Urbana in Ann Arbor, MI, USA
Certainly, a good CPA can attest to validity of the stmts and the reliability of recent cash performance. And that's very mportant to the bank.
That said...and I mean no disrespect to CPAs. But I'd be stunned if his CPA actually knows: (1) how his company wins it's business, (2) how the company's positioned in the mkt, or (3) how that market might evolve over the next 5-10 years. THAT's the cash flow you're buying and relying on (or will be grieving if it declines).
So, what Steve said.
P.S. Oh. If you can raise 10x private equity sans diligence, I'll sell you my business, and discount to 9x! :-)