- Free cash flow the business generates
- Multiple of that cash flow a buyer is willing to pay
For our purposes EBITDA and free cash flow are basically the same. It is the cash flow the business will generate to the buyer without the owner(s) associated compensation, expenses being run through the business and all one-time expenses added back.
Size of the EBITDA / cash flow
Amount of new construction and project based work
Amount of service and maintenance work
Revenue growth year over year
Marketing reputation management
Lead generation program
Size of technician crew
Business runs independent of owner involvement
Either is possible. It depends on your timeline / objectives, who the buyer is and what their plans on with the business. By having a partial sale you are able to “pull some chips off the table” continue to run and grow the business then sell the remaining piece down the road with a clear exit and transition plan.
A transaction takes around 6 months to complete and the buyer will want to structure a transaction that meets your objectives. If that means stay you for several years great, if that means leave quickly then that is fine also. Whatever works for you and the buyer.
National and regional consolidators backed by private equity firms looking to buy smaller companies and merge them into a larger company
Strategic buyers – companies in same sector wanting to expand into your geo market or companies in same geo market wanting your service lines.
Owner / operator – younger version of you. Someone wanting to buy a business, replace your responsibilities, run and grow it for next 10+ years.
The buyer certainly needs them to stay and help run the business. In many instances the pay, benefits and potential for career advancement actually improves as they become part of a larger company.
The buying and consolidation will continue for at least several years, the current valuations paid is anyone’s guess.
We are paid a success fee at closing if and when the transaction is completed. The range of the fee varies based upon the size of the transaction. There is no retainer or monthly support fee during the process. We only get paid if a deal is completed.
You are never locked into a commitment to the process or with us. If at any time you change your mind or are not satisfied with our performance, you can cancel the agreement and nothing is owed. Furthermore, if you are not satisfied with any offer or any buyer you are under no obligation to accept the offer.
