How to Sell a Consulting Business for 12 X EBITDA (Without an Earn-Out)
“Pete Martin, co-founder of EntryPoint Consulting shares his story on how he sold his business to a strategic buyer,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “He provides insight into the process and what buyers should do when a deal stalls. He took it head on and approached the CEO of the acquiring company. He was then able to overcome the buyers hesitation to close the transaction and enjoy a very strong multiple.”
Pete Martin built EntryPoint Consulting to 34 employees when he sold it to KPMG for a staggering 12 times earnings — without an earn-out.
In an industry that usually trades at low single-digit multiples, most of which is generally tied to a lengthy earn-out, Martin’s exit is an epic achievement. In this episode, you’ll discover:
- Two specific tactics to pull yourself out of the operations of your business.
- How to create an “on-ramp” offering.
- Two things Martin did to convince KPMG to buy EntryPoint without an earn-out.
- Why you should never separate the negotiation of terms from the price.
- How to protect yourself from a competitor posing as an acquirer to steal your employees.
You’ll also get understandable definitions for M&A lingo like:
- Indication of Interest (IOI)
- Downstroke