Exploring add on of $1 mm EBITDA business to $2 mm EBITDA business
One of our competitors has gone to market the last two years and hasn't been able to sell. They're around $1 million of EBITDA with a ton of customer concentration (<20 customers, top 2 make up 50% of the business), and their CEO wants to walk away. We are a direct competitor with $2 million of EBITDA. We are both in digital marketing businesses that are somewhat AI exposed.
We will most likely be able to do a deal at 5x, with light structure, and realize ~$500,000 of cost synergies across the two businesses.
I haven't done an acquisition like this before, and to be honest, I'm a little worried, given I run a bootstrapped company with no debt that I own 100% of.
With that said, we have been talking about selling our business and the multiple range as you approach $3 million of EBITDA is 7-9x so it'd be nice to get there faster.
What would you be thinking about if you were in my situation?