I'm targeting an e-commerce business with ~$6M revenue. Seller is currently both a wholesaler/distributor of a brand name product and he has a retail e-commerce site that sells the brand directly to consumers. These two components (wholesale and retail) have been operated as one business but he's selling the e-commerce site and holding onto the wholesale/distributor side. One of the challenges is that the seller didn't keep separate books for the retail e-commerce site. Revenue and most expenses were easy to break out, but the balance sheet was not. Determining net working capital will likely be a bit of a challenge and I'm not sure how I should propose to handle inventory. The seller indicates that he doesn't intend to include any inventory in the purchase price, which I understand is fairly common in the acquisition of a retail business acquisition but without a balance sheet to help calculate NWC, I am not sure if I should ask for a "normal" level of inventory to be included in the purchase price. Any thoughts on how to handle inventory in a situation like this? Thanks in advance.
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
124 views
13 comments
Sign in to see all replies.
Create an account.