seller’s Retirement Age – 62 years old, ready to retire at 65
Process start to finish took 18 months
Created Confidential information memorandum (CIM)
Multiple offers received
strategic buyer identified
Full Price Offer received
buyer financing arranged by M&A advisor
key man employee contracts put in place
Purchase price structured to minimize taxes
Sellers discretionary earnings: $250,000
Sale Price: $800,000
transitional employee contract: $300,000
Total value of the transaction to the seller: $1,100,000
FINAL VALUE: 4.4X Multiple of Net cash flow
Client Story
The seller and his wife were ecstatic at the final results of the transaction. The net proceeds from the sale were higher than anticipated. The seller was able to take his chips off of the table while the business was still able to command a premium. He was then able to run the business under the new owner who wanted to retain all employees for the long term. The seller was allowed the freedom of continuing to do what he loved for as long as he would like with a growing company all while reducing his workload and responsibility. He was able to achieve his goal of spending more time with his new grand children. Our favorite client situation is when we are contacted early enough to stage the company for sale.