IT IS ALL ABOUT TIMING!
Many years ago, I was asked to express an opinion of value on a decades old business. Revenue was $3,000,000. EBITDA was $100,000. employed 28, located in a facility that was decorated 20 years out of date. Sales had been declining from year to year and the prospects for the future did not look bright. I hazarded a range of $500 to $600,000. At that point, the prospective client, who had just turned 69, jumped up from behind his desk and exploded “You’re crazy, …. I turned down $5,000,000. for this business.”
With that he reached down into his desk, and pulled a file folder from a drawer and threw it at me. The bulldog clip holding it together slipped off and the contents flew all over the room. He then sat down and with his head in his hands, began to sob!
I was speechless, spellbound and didn’t know what to do. My first inclination was to get out of there as quickly as possible, but I sensed the danger had passed as I looked upon the man with his head in his hands, sobbing uncontrollably. So I slowly started to gather the papers that were strewn all over his office and began to re-collate them. The documents were indeed an offer for $5,000,000. but it was dated 5 years earlier. Attached to the offer was a copy of the financial statements of the day, but they told a completely different story than the ones I had just looked at. ( View the complete article)
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Robbinex Inc. is a Mergers and Acquisitions firm that consults and represents clients with the sale of their privately held, mid-market companies. For details on Robbinex visit www.robbinex.com. If you would like to alter receipt of this electronic mail program or change your email address, send a note to . |