How to Build and Sell a $19M Distribution Business
“Sean McAuliffe founded a distribution business and eventually sold to a private equity company for multi millions,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “In this episode we cover how to avoid running out of cash as inventory grows, handling working capital negotiations during due diligence and deciding how much equity to roll over in an acquisition.”
Sean McAuliffe didn’t invent anything. He was a distributor.
If you lost your car keys and went to a locksmith to cut a new set, chances are your locksmith got the replacement key from Sean’s business. He bought cheap keys from Asia and sold them to locksmiths. Nothing fancy. Like so many businesses, Sean was a middleman. He’d never really thought about selling—didn’t think anyone would want to buy it—but when a private equity group offered him millions, Sean realized he was sitting on a potential goldmine.
In this episode of Built to Sell Radio, you’ll discover how to:
- Build a moat in a distribution business
- Avoid running out of cash as inventory grows
- Price SKUs based on margin and velocity
- Handle working capital negotiations during diligence
- Avoid getting spooked when an acquirer stops responding
- Sell a non-technical business for 4–6× EBITDA
- Decide how much equity to roll into a PE-backed platform
This is an Exit Story episode of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your business.