Thoughts on wild listing prices

January 22, 2025
by a searcher from Columbia University - Columbia Business School in Washington, DC, USA
Here’s a few that stand out
- - Broker listed a lumber business for 16x, explaining to me that she wanted full replacement value for all the assets on top of the industry standard 3x cash flow multiple
- - Broker for small landscaping business wanted 9x for business and real estate, having valued the real estate 10x higher than comps suggest
- - Broker for home goods company listed the business at 3x, but wanted me to purchase $2M of inventory on top of that for an effective multiple of 6x
- - Broker and I agreed that comps support 3x for his glass repair business, but he still expected 5x for some reason
- the list goes on...
Is it worth playing ball to eventually get in front of the seller to reset expectations?
Also seems like sellers might benefit from some type of sell side consulting to gut check their own CIMs…
from Duke University in Tulsa, OK, USA
It is time consuming to find but there are probably good brokers in your region who are well connected and get sellers via referrals from other sellers, local trust companies, local wealth management companies, etc. Those are the ones you need to find and differentiate yourself with from other business buyers in a good way to find the quality businesses if you are going to search with brokers.
from Wake Forest University in Winston-Salem, NC, USA