Help with SDE Multiple in Cabinet Sales and Design

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by a searcher from Pomona College
in South Kingstown, RI, USA

1yr ago

Help with SDE Multiple in Cabinet Sales and Design

Looking at a small deal. Cabinet Sales and Design, no manufacturing or installation. $1.5mm revenue, $300k SDE. I am having trouble finding comps. Broker is using 3x which feels high for such a small deal, but I would love to have data to show him why. Any help is hugely appreciated.

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reply by a searcher 1yr ago
from New York University in New York, NY, USA

I wouldnt get to held up on the multiple. 3x is a standard go to, but you can rationalize it to be lower if the business has been declining. Also there are other things to negotiate, (e.g. inventory, pre-paid cash from customers, etc...) My previous deal was 4x SDE, but if you took in to account of the the cash, equipment and inventory, I was paying 2x SDE.

reply by a lender 1yr ago
from University of Missouri in Denver, CO, USA

Agree with De Zhang. 3x does seem fairly reasonable, maybe a bit lower if the business has been declining at all. If you are in need of SBA funding, reach out. Would love to finance this.