We approached a competitor about buying their business and they decided to engage a business broker. The info sheet they provided was very limited with gross sales for a few years, gross margin, & an "adjusted" EBITDA. They would not elaborate upon what was included in that calculation. Since we were unable to make an offer they say they are going to explore the general M&A market. Any advice on how to crack this egg would be appreciated.
Hi there!
This is a standard technique used by the sellers. I'm assuming the business broker wanted you to submit a bid - you should submit a bid to show the other side that you are serious about a transaction (note: a preliminary bid will be non-binding, and will generally include a valuation range). If the seller is satisfied with the range you listed (and you're not worlds apart on valuation), they will then let you look deeper under the hood - during this next round of bidding is when you will generally be able to request full audited financials, etc.
Hope this helps, and let me know if you'd like to chat further!
maximspiegel [at] gmail.com
Answered 9 years ago
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