I have a couple companies that I'm interested in but after getting their CIMs they are wildly overestimating their value and I’m wondering if anyone has had any success resetting expectations and still being able to reach a deal. They are both going through the same broker, but he is primarily a CRE broker rather than business broker. He admitted on a call that this wasn’t something he normally does but is helping out a couple people from his network. These businesses have unsurprisingly been on the market for almost two years now.
The valuation for their business was already on the higher end for what they do at 5x EBITDA but they then added the business assets as a separate line in the valuation, almost doubling the “value” of the company by double counting these assets.
I’m wondering if anyone in the community has had any luck resetting expectations with the Seller and how you did it respectfully. I was considering pulling together comps but I don’t want to waste their time and mine going through too much if they aren’t being serious.
Thanks!
Advice on Unrealistic Seller Valuations
by a searcher from The University of Chicago - Booth School of Business
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