What's the best way to push back on add-backs in a brokered deal?

by a searcher from Wake Forest University

6 years ago

I've been looking at some brokered deals this week where the add-backs are laughable. Anyone found the right time/manner to push back? Are you just putting your own proposal together and ignoring what they've done, or have you found some other way to be more effective at bringing reality into the conversation?

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8 comments

professional from James Madison University

I see these all the time but I wouldn't pay too much attention to them when it comes to your work or process. If your actively searching or analyzing these CIMS Id be happy to talk specifics if you'd like.

8 months ago | like reply | 0 likes

searcher from University of Texas at Austin

@Ryan -- what is the benefit of formalizing the EBITDA number in the LOI? My approach is to accept or reject their adjustments then add in my own and come up with a multiple that is acceptable to me and only put the offer price in the LOI. If there is a major adjustment (say $100k for a manager position) then I may call that out as a key driver for my offer price vs. asking price. I would rather have the owner just focus on the price and not an EBITDA multiple.

And adding back 100% of office expenses isn't laughable.....

6 years ago | like reply | 1 like

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