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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.
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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.