A new class of buyers is emerging—trained at Harvard Business School and other top MBA programs to acquire small businesses like yours. These Entrepreneurship Through Acquisition (ETA) buyers aren’t traditional founders. They’re dealmakers using investor capital and bank debt to purchase enduringly profitable companies they hope to be able to manage and grow.
In this week’s episode of Built to Sell Radio, Harvard professors Rick Ruback and Royce Yudkoff explain the ETA playbook they have taught for the past 15 years and what it means for sellers. You’ll discover:
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How ETA buyers structure deals to minimize their personal risk.
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Why negotiating with an ETA buyer often means a longer, more uncertain diligence process.
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What to look for in an ETA buyer that is actually capable of running your business.
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The telltale signs of an ETA graduate that may struggle to maintain your company’s legacy.
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Why some ETA buyers misunderstand the soul of your business—and what that means for your employees.
For some business owners, an ETA buyer can be a legitimate path to exit—especially if private equity isn’t interested in your niche. But before you enter negotiations, you need to understand their playbook.
To better understand what acquirers value in your company and to confidently navigate negotiations, talk to us today.
Quote of the Week
ETA buyers typically value businesses at four to five times cash flow—regardless of what a seller thinks it’s worth.
Deals
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Aspen Manufacturing, a U.S.-based maker of evaporator coils and air handling units for residential and light commercial HVAC systems, has been acquired by CSW Industrials, Inc. (Nasdaq: CSWI) for $313.5 million in cash. Aspen is expected to generate $28.5 million in adjusted EBITDA in 2024, with the acquisition price reflecting an EBITDA multiple of 11.0 times.
