How to Structure a Deal When the Building Kills EBITDA?

February 12, 2025
by a searcher from Brigham Young University Hawaii in Queen Creek, AZ, USA
I’m evaluating a business where the valuation came in at 5.5x EBITDA, which my partners and I feel is fair. The challenge is that the owner will only sell the business if the building is included.
The problem? The owner has owned the building for years and is only paying around $9,000/month. If we were to buy the building at today’s rates, our payments would jump to $22,000/month, which would eat up nearly all of the remaining EBITDA.
We’re trying to figure out how to structure this deal so it still makes financial sense. Has anyone dealt with a similar situation? I would love to hear any creative deal structures, financing options, or terms that might help make this work.
Appreciate any insights!
from University of Michigan in Dallas, TX, USA
Holler if I can help! Otherwise see you in Provo in a few weeks, Briggs!
in Stuart, FL, USA