I am considering buying a light manufacturing business that is positioned as priced at 4X the weighted trailing six years of EBITDA plus the value of inventory plus working capital. The three most recent years are weighted at 75% and the 3 years prior weighted at 25%. Are working capital and the value of inventory normally included as part of the 4X multiple consideration? If they are, can someone point me at documentation I can use as backup for that position as I'm going to need to have a conversation with the seller. I appreciate the brain trust!
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
531 views
30 comments
Sign in to see all replies.
Create an account.