“Mike Malatesta, founder of Advanced Waste Services, wasn’t planning on selling his business when a strategic buyer approached him.  The offer was too good to pass up so Mike decided to sell his business,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “There are many excellent tips on what to do and not to do in this story when selling.  Hear how Mike made a $4M mistake during the process.”

Mike Malatesta built Advanced Waste Services, a company that helped businesses dispose of their industrial waste, to $45 million in annual sales before a fateful lunch changed his life forever. It was with a division president of Covanta (NYSE: CVA) who saw acquiring Malatesta’s company as the perfect way to enter the industrial waste industry.

After creating a mini bidding war for his business, Malatesta agreed to be acquired for $51.5 million or around eight times EBITDA. For Malatesta, who started his business picking up industrial waste in a truck, it was an incredible outcome. In this episode, you’ll discover:

  • How you need to change your management style once you hit $10 million in sales.
  • How “key man” insurance works.
  • What a platform acquisition does.
  • How to nudge up an acquisition offer without overplaying your hand.
  • The difference between “reoccurring” revenue and “recurring” revenue and which one acquirers like more.
  • A negotiation mistake that ended up costing Malatesta $4 million.
  • How an escrow works and why it’s different than an earn-out.

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