Anyone know margins for retail Distributors

June 01, 2021

by an investor in Charleston, SC, USA

Today I inquired of a business that I want to buy. Its a Beauty and Health Supply Distributorship serving grocers and drug stores nationwide. Its doing 23M in revenue. EBITA is 1.4M. Owner is telling me he has been offered 10x EBITA so 14M for business. This business operates from East to West. I want it as a platform to bolt on/rollup retail opportunities in the highly fragmented ethnic Beauty Supply industry. Anybody interested in this space or can share with me thoughts on numbers.

Reply by a searcher
from Georgetown University in Chicago, IL, USA

Worked with a distributor a few years ago, EBITDA margins were in that 3-5% range so that margin doesn't seem too far off.

I'd be skeptical of 10x for a 1.4MM business (in my limited experience). If that is true then its probably a strategic who can rationalize DCs, substantial headcount, etc.

Reply by a professional
from Oregon State University in Kuna, ID, USA

Check out the DealStats data, on Searchfunder. Health and Personal Care Stores seem to be around 5x EBITDA according to our data set. If you'd like to learn more about the underlying data, feel free to message me any time.

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