Ryan Daniel Moran built Sheer Strength, a supplements business, up to a run rate of around $10 million per year when he decided it was time to sell.
He quickly got a few offers and settled on one from a private equity group that valued Sheer Strength at $17.5 million or around five times Moran’s $3.5 million in EBITDA. Moran and his partner were ecstatic and signed a Letter of Intent, but things were not quite as they seemed. In this cautionary tale of what can happen when you sell to the wrong buyer, you’ll learn:
- Why Moran recommends going into an M&A process with your list of terms.
- Why Moran equates the selling process to a bad episode of “The Bachelor.”
- One common reason acquirers re-trade after an LOI is signed.
- The danger of taking part of your proceeds in shares.
- What happens when your acquirer goes bankrupt.
- Why Moran advises doing absolutely nothing with your money for six months after you sell.
Please note: this episode includes language some listeners may find offensive.