Hello Search Funder Community.
Below is an overview of our Acquisition Model.
Would love to see how others do things.

Our Acquisition Model: Here are some criteria and conditions that need to be met to make a deal happen within our acquisition model.
Who We Are: We are Deal Team USA, based out of NH, with a global team, serving the entire United States. We are a group of ambitious and experienced entrepreneurs and industry professionals who are working together to find, buy and grow existing companies to the next level. We believe in team work before self, employees are the true asset of any business, legacies matter, win-win-win negotiations, and long term thinking.
As important as the company is, we prioritize the people fit even more, seeking long term cooperative and beneficial relationships with sellers.

• Find solid profitable companies with motivated sellers. • Create win-win-win deals that preserve the company legacy.
• Preserve and grow with existing employees.
• Smooth transitions. • Post close growth. • Long term, patient owners.
• Sufficient existing profits, approx. $750k and higher.

Our Value Add:
• Apply our extensive resources and experience to: • Find attractive companies • Structure solid transfer agreements • Fund deals • Complete DD and close • Successful Leadership Transitions • Prioritize people over short term profits • Growth Companies 20%/year • Think long term

ON Buy side: • We function as a team, believing that more heads are better than one.
• We are experienced at acquisitions, have done this before.
• We are skilled operators, we have run dozens of companies over 40 years.
• We are able to finance/fund deals with: o To keep average cost of capital as low as possible, we use Senior Debt, in this case primarily SBA $.
o Access to equity as needed. • We also require some seller financing to mitigate risk.
• Sometimes equity roll overs and earn outs to maximize seller benefits.
• Ready to act and eager to close.
• Value good people fit.

On Sell Side: Need: • Solid company with proven track record of profits (so it is fundable) • Good growth prospects. • Motivated seller with reasonable price expectations.

Sellers Characteristics:
• Sellers who are motivated to sell for personal/lifestyle reasons and are looking to transition out of full-time leadership responsibilities.
• Sellers who are confident enough in their companies to carry minority seller financing.
• Sellers that we enjoy spending time with. Good people fit.

Post Closing Value-Add from Seller:
• Knowledge transfer and relationship hand off, 30 days.
• Advisory role for 2-6 months for additional compensation. • Possibly longer term engagement on case by case basis.

Price-Value Factors: • Enough existing profits to support new debt with sufficient DSCR to leave safety cushion and money available to reinvest to grow.
• Current Value is Established by past results, not future projections. • Growth trajectory is considered in current value.
• Deal structure contributes to deal value. • Risk factors are important. • Strength of staff remaining after seller leaves. • Enough people left in business after seller(s) leave to maintain continuity and minimize post closing decline.
• Enough customer diversity to avoid risk of prime customer(s) leaving.
• Scalable business model that can grow 20%/year and double in 3-5 years.

Process: • LOI to closing is###-###-#### days, with 45 as target. DD, Purchase contract and funding done simultaneously.
• Transition: Post closing leadership transition • Seller moves on in life

Transfer Structure: 338(h)(10) transfer:
• Sale is treated as an asset sale for tax purposes • Treated as stock sale for legal purposes. We want to retain the continuity of the existing legal entity.

All-Inclusive Package: Ongoing Business, with all necessary assets included.
• We want the business to function the day after closing the same way it functioned he day before closing. In simple terms, the seller walks out the door and hands us the keys.
• Specifically this means that all the assets required to operate the business are conveyed with the business, including equipment, inventory, A/R, A/P, and sufficient Working Capital to operate the business as it has operated in the past. Real Estate is handled separately and is in addition to the Enterprise Value of the business.

Adjusted EBITDA vs. SDE • We understand Add-Backs, as long as they are reasonable.
• Commonly used SDE is helpful benchmark, but does not represent cash generated by company.
• Adjusted EBITDA is SDE less salaries needed to replace sellers duties.
• Capital Expenditures also need to be subtracted from SDE (If depreciation was added back)
• Formula: to Calculate Adjusted EBITDA o Starting with Net Income from Tax Return: o Add back legitimate ‘Add-Backs’ including expenses for Interest, Taxes, Depreciation, Amortization, Seller Benefits and other Legit non-recurring expenses.
o This number is SDE o From SDE, subtract: required salaries to pay people to do sellers jobs.
o Subtract annual capital expenditures (assuming depreciation was added back) o This number is Adjusted EBITDA and is a reasonable approximation of the Free Cash Flow generated by the company’s operations.
• Adjusted EBITDA is the more accurate number to use for calculating Enterprise Value using common ‘multiples’.
• The companies we buy typically trade in the 2-4x’s range.

Next Steps:
o If you are a seller, or a broker with a good business, we would like to engage with you to learn more about the opportunity and see if we have a good fit to work together.
o You get to hand your legacy off to caring and responsible buyers. o We get the opportunity to build on your success and grow the company so we all can be proud.

Would love to connect with others and learn the nuance of how you do deals. --@----.com