Does anyone have experience owning a niche, light manufacturing business?

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August 14, 2022

by an investor from Columbia University - Columbia Business School in Jacksonville, FL, USA

If you have worked in PE in this area or have operated in this area, I would love to discuss it. I am looking at a 1.5M EBTIDA business but it seems rich at 7x EBITDA. Any advice would be greatly appreciated.

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Reply by an investor
from Illinois Institute of Technology in Pasadena, CA, USA
Median Deal Multiples by EBITDA Size of Company, Page 50, Pepperdine Capital Markets Report, 2021...https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1013&context=gsbm_pcm_pcmr###-###-#### 0X for manufacturing
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Reply by a searcher
from Harvard University in Boston, MA, USA
That's pricey. Unless it's a very scalable business or crazy sticky customers, that price would be difficult to swallow. Depending on the type debt you're looking at, I would be nervous on your debt service on that price. You should give yourself enough wiggle room to make mistakes and lose customers in your first year.
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