One Strategy Took Them From 12.5 to 16 times EBITDA
“Arleen and Ted Taveras received an attractive offer for their insurance consultancy business right at the beginning of COVID. It was tempting to accept the offer and walk away from their very successful business,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “Fortunately they went to market and received multiple offers. The winning bidder was much higher than their original offer. Had they not walked away from the first offer they would have left chips on the table.”
Arleen & Ted Taveras had been growing their insurance consultancy for twenty years when they received an unsolicited acquisition offer for 12.5 times EBITDA.
It was a tempting offer from an industry stalwart, but Arleen & Ted wondered if they might be leaving money on the table.
Rather than accept the offer, the couple decided to hire an advisor to shop their company in a formal sale process which garnered 27 expressions of interest, 12 of whom made a formal offer. Ultimately, Arleen & Ted agreed to a cash offer of around 16 times earnings – more than their original, unsolicited bid.
In this episode you’ll discover how to:
- Gracefully turn down unsolicited offers without dampening their interest.
- Use the unsolicited offers you get from private equity groups.
- Get employees to think like owners.
- Create a turnkey operation using video-based Standard Operating Procedures (SOPs).
- Stay calm at the prospect of losing a multimillion dollar offer.
- Calculate the right amount of your sale proceeds to share with your employees.
- Handle retained earnings building up inside your company so that you don’t lose them as part of an acquisition.