High Inventory Buisness

by a searcher from Western Governors University

1 year ago

Hey all - 

Does anyone have any experience with super-high inventory deals? I'm looking at an equipment repair company on track to do $1mm in EBITDA this year but $3.5mm in inventory. Inventory growth has grown in line with revenues over the last five years and is eating much/most of the biz cash. 

I like the biz - I'm thinking about doing a purchase option where I pay a multiple of cash + buy the inventory as I use it for a higher purchase price than if I did an all-cash deal. I want to do that without creating a new legal structure that will blow everyone's brains up. 

Does anyone have any experience with that and talking a seller through that? I appreciate any advice you can provide. 

Thanks!

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searcher from University of Basel

Following

8 months ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

I’m looking at an electrical/lighting maintenance business that meets this criteria, what ended up happening? Do you have a model for buying the inventory as you go?

9 months ago | like reply | 0 likes

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