How to structure a deal with tremendous recent growth?

May 29, 2024
by a searcher in Cincinnati, OH, USA
Company has had tremendous growth in recent years, along with key management turnover. How would you structure offer based on the recent trends while remaining with the SBA requirements?
Revenue | Adjusted EBITDA
'21: $2.7m | $500K '22: $4.5m | $1.3m '23: $4.7m | $1.7m
from Northwestern University in Southborough, MA, USA
In terms of structuring - that's up to you. Are you comfortable with the reasons behind the growth? Structure as you would normally (and maybe try to average the revenue and profits over the last 3 years to give you a bit of preferred pricing on any multiples discussed). If you are uncomfortable with the reasons for the growth, offer the seller an earnout that will meet her/his/their expected growth payout, but also protect you if their assumptions and expectations end up not being correct.
Good luck!
from Ryerson University in Toronto, ON, Canada
Wondering if this is a good deal, in light of what was said in other comments regarding the forgiveability of the note portion to de-risk the situation?
Thanks in advance