Friends,
I am looking at a distribution business that turns over its inventory about 10-11x per year. Total revenue is $6.5-7.5mln/yr with SDE of ~$1mln/yr. Typical inventory value is ~$600k with the warehouse rented and not owned. Total employees that will come after purchase is 3 (1 sales, 1 ops and 1 warehouse/phone/utility man). The business has shown steady financial results in recent years with modest (~10%) growth in the past year but exposed to an end-market that could generate more sizable growth due to increasing end-market demand for the products distributed. Customer concentration is fairly low with no customer > 20% of revenue. My question for you guys is what is the appropriate multiple to pay for this business given the facts above. Thanks in advance for any thoughts!
I am looking at a distribution business that turns over its inventory about 10-11x per year. Total revenue is $6.5-7.5mln/yr with SDE of ~$1mln/yr. Typical inventory value is ~$600k with the warehouse rented and not owned. Total employees that will come after purchase is 3 (1 sales, 1 ops and 1 warehouse/phone/utility man). The business has shown steady financial results in recent years with modest (~10%) growth in the past year but exposed to an end-market that could generate more sizable growth due to increasing end-market demand for the products distributed. Customer concentration is fairly low with no customer > 20% of revenue. My question for you guys is what is the appropriate multiple to pay for this business given the facts above. Thanks in advance for any thoughts!
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