I am in talks with a company that does $3.6MM in EBITDA on $8.5MM of revenue. They have been operating for 40+ years and appear to have consistent cashflow with a high degree of recurring revenue. The company also has excellent creditworthiness with its bank. I'm considering a leveraged buyout strategy for this acquisition given the creditworthiness.
Are there any "watch outs" I should consider in pursuing this path as a self-funded searcher? Am I naïve to think a bank would load this sort of company up with debt to be managed by someone with limited operating experience?
I have a warm group of investors that are experienced and would be interested to participate in an equity capacity. However, I'm wondering if a LBO path should be given more consideration.
I appreciate any insight and guidance the community can share based on prior experiences. Thank you
LBO - leveraged buyout opportunity - things to consider
by a searcher from Dartmouth College
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