How One Founder Moved Her Multiple From 2 to 8 Times EBITDA

How One Founder Moved Her Multiple From 2 to 8 Times EBITDA

“Kristin Kahle built Navigate HCR to a 40+ employee business before she decided to sell,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “She realized she needed to add a technology piece that nobody else could offer to set her business apart. She also shares three very important actions she took to get her business ready to sell.”

Dr. Kristin Kahle helps businesses pick a benefits program for their employees.

She started three insurance agencies, and the first two were service businesses that sold for a modest 1.5-2 times EBITDA.

With her third business, Kahle wanted to attract a higher multiple, so she decided to transform it into a technology company. Kahle built Navigate HCR up to more than 40 employees before she decided to sell. She got three offers and ended up agreeing to be acquired for around 8 x EBITDA plus a five-year contract that guarantees her employment.

Here’s what you’ll learn from Kahle’s story:

  • Why five years may be the ideal time to own a business.
  • The $300,000 mistake Kahle made in trying to transition a service company into a technology business.
  • How to massage your books to jack up your EBITDA and maximize the value you take from your sale.
  • Why having something propriety nobody else offers matters to both your customers and potential acquirers.
  • The value of long-term contracts.
  • How to start an acquisition conversation with an acquirer through the person responsible for partnerships.
  • A unique way to carve out time to work on your M&A deal.
  • Why potential acquirers asking you for less information should be a red flag.

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