EBITDA Multiple for Car Dealership

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November 02, 2020

by a searcher in Florida, USA

We are looking at a dealership, similar to a car dealership, to acquire. It is not exactly a car dealership but instead sell other high value assets. They provide follow on services to the assets they sell. This is a commodity business with no differentiation. EBTIDA margin is 6% as the business incurs a high cost to purchase the assets and then resell them. Revenue is VERY high but, again, EBITDA is 6%.

What would you offer as an EBITDA multiple?

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commentor profile
Reply by a searcher
from Campbell University in Emerald Isle, NC 28594, USA
What other information about the business could you share? Amount and consistency of EBITDA? How long have they been in business? Concentration of customer base? Competition? Is the 6% EBITDA an average over several years? There are a lot of other factors that will play into such a valuation.

I worked as a accountant for a multi-car dealership in NC and cash flow swings are dramatic with high dollar retail items. Despite there being a lot of competition the name of the game was volume since margins were so low.
commentor profile
Reply by a searcher
from University of Colorado at Boulder in Los Angeles, CA, USA
I am looking at a commercial truck dealership. If similar and want to compare notes ping me.
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