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Reply to "Offers to buy my company basically out of the blue… not sure what to do next"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]That’s not a great multiple unless your EBITDA is lower than I’m assuming from your profit number? It would only make sense if you are getting that buyout but keeping a decent percentage of equity? And is the buyer PE or in the industry? Industry there’s no guaranteed exit in a decent time frame so I’d want an earn out. PE what is their track record? And what’s their average life before exit? [/quote] With knowing the type of business how do you know whether the ebidta multiple is low or high? The earn out is an extra .5 EBIDTA. It’s fairly insignificant. The offer is effectively cash with a 1 year transition period. [/quote] Yeah - If you expect fairly low growth of profits, the offer may be good. If you expect high growth of profits, then it’s probably low.[/quote]
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