Valuation Multiple for Aerospace Distribution company

For #2 in your key take aways, I typically get advised to not purchase the real estate, instead just rent it from the seller for the short-term and negotiate the ability to purchase it in the near future with some sort of rights of first refusal. The concern from folks that had provided this advice comes for example from getting stuck with a property which will not be big enough to support the growth of the business, needing to move to another location and having now a commercial real estate to manage. I think I was advised to rent for 5 years, and then see if it makes sense to purchase. This advise has typically come from folks that see the property and business as separate investments, and prefer to focus on the business instead of real estate. I can see the advantage of increasing the length of amortization...what is best, will depend on the context of each deal, but just sharing another perspective that I've heard in the past.

Be aware that aerospace can be quite lumpy with program launches so make sure you study the revenue trends and understand the revenue cycle/trends in the business. With EBITDA under $500k, there is not much margin for error in this business.