I have come across quite a few business where TTM and/or base year revenue and/or EBITDA is significantly higher than it was in the previous years. For example: one business had EBITDA around 700-800k from 2017 to 2020 and then it was 1.2 million+ in 2021 and TTM.

Could you please provide insights on:

1. How to forecast realistic post-acquisition EBITDA for such business and how to value this businesses?

2. Is it even worth pursuing these deals? If yes, how to structure the deal to minimize the risks: forgivable seller note or something else?
3. What should I investigate to make sure that nothing fishy was done to boost the revenue and/or EBITDA numbers