Transactions excluding inventory

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from Cornell University
in San Francisco, CA, USA

7mos ago

Transactions excluding inventory

Has anyone completed a transaction that excludes inventory? We are looking to do a post-sale inventory buyback. As a result, we have taken inventory out of the net working capital calculation. I am trying to ID adjustments to the calculation - specifically, do we take inventory-related A/P out of the calculation, is there anything else that should be adjusted. I have spoken with a few folks, but there do not seem to be a lot of people who have encountered this structure.

0 Likes

154 Views

reply by a professional 7mos ago
from York University in Toronto, ON, Canada

Typical process is to exclude inventory from the WC calculation which you've done and then do a pre-closing inventory count + purchase price adjustment. Might be helpful to think of it as (Purchase price for business) + (Inventory amount). If there's concerns about what that amount will be, you can mitigate it with things like "max inventory amount will be $X" or "excludes inventory that's 90+ days old"

reply by a searcher 7mos ago
from Bentley University in Boston, MA, USA

I am working through this in my current deal. I offered to pay for inventory at close, excluding anything obsolete (reading the comment above - I should have better defined obsolete in the LOI, but there is still time in my APA). It is subject to an accountant's audit/review. I looked at the inventory levels across several months of balance sheets to get comfortable with the amount, which was not tremendously significant in the context of the deal (<$100k). I suspect it changes industry to industry and on the total amount. I also made it simple and agreed to bring my own working capital at close. I feel like it will save me headaches down the road. Time will tell once APA is negotiated and signed.