Multiple of What?
May 18, 2016 |
Want to increase the value of your business by up to 71%?
Take the 13-minute survey and get your Value Builder Score
About this episode
Subscribe:
Dennis Hart sold his advertising agency for 7.1X. That sounds like a great exit but it disguises the complexity of the negotiations. Hart felt like he knew precisely how much EBITDA he generated until the buyer started questioning his math.
Hart walked away from the negotiating table twice. Eventually both parties were able to agree on a set of “add backs,” but this is a good reminder that, when it comes to selling your business, your EBITDA can be subjective.
To find out if you could fetch an offer for 7.1 times EBITDA, get your Value Builder Score.
About Our Guest
Dennis Hart founded Apex Media Sales in 1993. Generating approximately three quarters of a billion dollars in revenue shortly before the company was acquired by a fast growing media organization in 2007, Apex specialized in long-form direct response television advertising, servicing religious and infomercial advertisers. The company’s growth was fueled by leveraging substantial advertising opportunities, creating a strong sales initiative and crafting trade agreements as a unique way to capture broadcast television and national cable network airtime. A key component of the company’s growth was the development of a mousetrap in the form of proprietary software.
Related to this topic
Yvonne Tocquigny built her advertising agency up over 35 years working with clients like Jeep and Dell. Then in 2015, she got a call asking if she would consider selling. The problem was that her agency had become part of who she was.
Built to Sell Intel - July 2021
On this month's episode of Built to Sell Intel, John will be sharing key insights from the latest group of entrepreneurs interviewed on Built to Sell Radio. John recaps his favorite anecdotes in this monthly live broadcast, highlighting helpful strategies and transferable lessons.
How to Sell a Service Business Without an Earn-Out
In 2011, Jodie Cook started an eponymously named social media agency, JC Social Media. Over the next nine years, Cook built the business up to 16 employees. Then, she decided to sell at the end of 2020 and thought her company could be worth in the 5-7 times EBITDA range.
Carrie and Dave Kerpen started Likeable Media, a social media agency, in 2006. The business grew to more than 50 employees when the couple met for their annual partner's retreat. The Kerpens realized their business had blossomed into a big success which they estimated was close to 90% of their net worth.
10 X Earnings By Future Proofing Your Buyer
David Trewern grew DT to $10 million in annual revenue before he sold it to STW Group for almost 10 times profit after tax, getting maximum value for his business because he started to look at the world through the eyes of his would-be acquirer.
The Surprising Truth About Who Will Buy Your Company
In 1999, Andrew Weinreich sold Six Degrees for $125 million. In the following years, he went on to sell three other companies including one to IBM and another to Match.com. In this episode you will learn his secrets to exiting big.
Back in 2011, Nathan Latka started Heyo, a social media company that helped businesses advertise on Facebook. By 2016, Heyo had raised $2.5 million in seed and venture capital financing and, by all accounts, it was a successful business.