Acquisition
1. Type of business desired?
Seeking to acquire a firm that is business to business oriented. The majority of the buyers experience is in the technology, construction (HVAC), manufacturing,and insurance industries. The firm has to demonstrate some pent up demand for its products and a competitive advantage. A plus would be the business model could be made successful in more than one location. The buyer is highly interested in opportunities where additional mergers and acquisitions can be instrumental in driving growth.
The buyer is open to an existing owner who is ready to retire or is ready to exit their current ownership position for some other reason. Turnarounds are another opportunity as long as the demand and competitive advantage are strong. The buyer is open to a "work for equity" position. It is important the current owners are willing to assist in a successful transition.
2. Areas of Interest?
The buyer's background includes starting his own technology/training/consulting company and in 6 years grew that firm from a startup to being publicly traded with $65 million in revenue.
Again the buyer's preference for small business prevailed and in 1998 founded a consulting firm where he has been helping clients business staff merge processes and operations with technology. In these consulting assignments the buyer has been continuing to work with businesses in turnarounds, rapid growth, funding and plain just get the job done issues since 1998. The buyer is currently working with a technology firm in the Des Moines area and in the last 12 months has increased their revenues 29% and web traffic over 250%. The buyer enjoys the quality of life available in the Des Moines area and prefers to find a business he can acquire and become a part of the local community.
3. Preferred company profile?
The buyer is seeking a business that is currently in the range of $500,000 to $1 million in revenue where SBA funding can be available. For larger firms, $1 million to $5 million the buyer would be interested in firms that have some type of owner financing or where additional outside financing can be made available. The buyer would prefer a stable market with an established firm and an experienced work force to provide the opportunity to plan and lead the firm to the next level.
4. Preferred company financials.
a. Acquisition price range
- Below $1 million the buyer would use SBA funding, above $1 million the buyer would require outside funding or owner financing. Financing can occur in one of the following ways - an owner financed buy out over time for tax reasons or the business cash flows for a small business loan to be successful, or the business is successful where a group of investors could be brought into the picture.
b. Annual sales parameters
- The firm must have a defined marketplace and a competitive advantage.
c. Minimum gross margin requirements
- The company has to cash flow to meet my investment criteria.
d. Earnings before interest and taxes (EBIT) margin requirement
- The firm should have a EBITDA between 16% - 22% depending on industry. The company has to cash flow to meet the investment criteria.
e. Turnaround situations
- The buyer is open to turnarounds if the owner is willing to make the deal with true understanding of his current situation and the level of effort required and skills the buyer will be bringing to the deal.
5. Background and experience of candidates.
Information is available upon request.
6. Time frame for purchase.
The buyer is actively pursuing opportunities.
7. Other Specific requirements for a business purchase
The buyer would prefer the Des Moines area but is open to the right company at any location.
