VALUATION ON AN ASSET HEAVY BUSINESS
I'm looking at a business w/ $4-6M in assets (owner says $6, I think an independent appraisal will say ~$4), $5.8M in rev, and $1.5M in annual EBITDA (broker had him thinking adjusted EBITDA was close to $2). Diversified, decent reputation, good employees, and slowly growing even through Covid. Specialty manufacturing with great margins for the industry but zero IP or truly unique products.
I offered $6-10M (earn-out based on growth) and the broker talked the buyer out of it. Official response was: I have $6M in assets and would never sell for only that. He's had two other offers over the past three years. but both of the other buyers walked away. I may need to as well...
How would you think about pricing it?