Does anyone have experience buying companies with multiple years of losses

by a searcher

1 year ago

I’m looking at a large company with $50M+ in annual revenues, that has been losing money 4 out of the last 5 years due to low gross profit margins. 

I know there are other ways to value such a business and want to understand how.

Additionally what are some smart or creative ways I  might structure a deal to purchase the business?

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searcher from University of British Columbia - Sauder School of Business

Interesting question. I've yet to encounter a searcher who specifically targeted a turnaround. I would think that NOL carryforwards would need to enter the conversation at some point. From the financing side I think asset-backed financing (or even future receivables) would be your best bet if there is insufficient cashflow.

1 year ago | like reply | 0 likes

lender from Baylor University - Hankamer School of Business

I'd try non-bank lenders and traditional ABL lenders. If PGs look good, you might have more luck than you think.

1 year ago | like reply | 0 likes

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