LOI Submitted

by a searcher from Columbia University - Columbia Business School

3 years ago

Hi, I just submitted my LOI to the seller of an asset light small manufacturing business that's been around for 30+ years (owner retiring) based in New Jersey. Deal is $3.4M ($6M in rev and $1M EBITDA) selling for 3.4x, with healthy EBITDA growth. Will be meeting the seller on site at his plant this weekend to discuss further. 

A few items to note::
1. Business is a C Corp so stock sale is a preferred by seller, any pros/cons?
2. Besides understanding the capex and the WC needed at closing, any other important items to note at closing? Seller just purchased $200K machinery added to BS. 
3. What should I focus on when visiting on site and talking to seller?
4. Are there a list of contacts that I can reach out to once I have a signed LOI (ie; lender, investor, partners, operators, counsel, etc)

Any comments or thoughts are much appreciated.

4 likes
361 views
26 comments

searcher from Harvard University - Harvard Business School

Congrats Henry! Best of luck

4 days ago | like reply | 0 likes

intermediary from Pace University

One of the things that business people need to do more of is trust their gut. As your going through the tour, and looking at the numbers, don't overlook your "sense" of whether or not this is a great business. As I'm sure you'll agree, many times we have ignored that little voice inside us that tells us something is just not right and then lo and behold, a year later, our little voice is shown to be correct. In my 30 years of experience coaching CEOs the best ones are very data driven, but also trust their instincts. So use your mind and your heart when making such a big decision. Good luck!

3 weeks ago | like reply | 0 likes

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