Unfortunately I haven’t had one of these. I’m waiting though – it’s bound to happen.
One of the things preventing this is something I’ve written about in the past – the axiom that there are “no stupid buyers”. Moreover, if you do happen upon one, they typically have some advisors such as attorneys and CPAs that will set them straight – which typically means stringent due diligence, a few issues and no quick and easy deal.
But they do happen, just not for me yet. Here are some true (not rumor) examples I’ve witnessed that happened in the last year. I did change some of the facts because of confidentiality.
A business owner decided to sell and engaged with an M&A broker. The broker estimated the business value at $1.2 million and the real estate at $800K for a total of $2 million. The following week a real estate agent walked into the business and said he was acting on behalf of a large national firm looking for regional offices and they wanted to buy the real estate in an expedited deal. For $2 million dollars. Done.
A company that has a highly recurring subscription based model was preparing to sell and had received advice that because of their high level of recurring revenue they would likely sell at a premium, well above the typical 5X EBITDA for a company that size. However they were not yet at $1 million in EBITDA which was the goal before selling. Well, they were processing a very large amount of credit card charges each month based on their subscription model – and a credit card processing company saw great value in securing that revenue through their platform. They paid over 20x EBITDA in a quick deal, with absolutely no synergy at all except for the credit card processing. That is great for the business owners, but the failed conglomerates of the 1960s has shown that true synergy is typically required for a successful acquisition. I guess we’ll see on that one.
If you have a quick and easy deal you need done, please let me know. I’m still waiting.