Murray Kent bought a four-person electrical conduit business for $40,000. It looked like a crack den. He had no industry experience. What he did have was Value Builder’s 8 drivers — pinned to the wall next to his desk as a literal road map for every decision he made.
Ten years later, private equity called out of the blue. Murray was genuinely not sure he wanted to sell. That ambivalence, partly natural, partly strategic, led to a deal at 6.2 times EBITDA, paid in full cash at closing, with no equity rollover and a retention amount of less than 5% tied to no performance conditions whatsoever.
In this week’s episode, Murray walks John through how he got his largest customer from 50% of revenue down to the low 20s, why the first offer made him suspicious rather than excited, how he broke the news to 35 employees in small groups without the first group tipping off the next, and what he wishes he had known going in.
His answer to that last question is worth the listen on its own.
PS. If you’re already working with a Value Builder advisor, good move. If not, reply to this email and I’ll find you one.
Quote of the Week
Even if you don’t sell, you’re going to make the business better using that framework anyway.
Deals
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Beyondsoft, a global IT consulting and technology services firm that helps businesses build and manage software, sold a 51% controlling stake to Nuvini Group (Nasdaq: NVNI), a serial acquirer of B2B software companies, for $80.7M, implying a total enterprise value of $158M. Beyondsoft generated $148M in combined revenue, implying a valuation of 1.4x revenue.
