When you think about selling your company, it’s easy to picture giant corporations or private equity groups offering outlandish multiples. But the truth is, most small businesses are acquired by other small businesses.
This week we sat down with Kristi Herold, the founder of JAM, a Toronto-based company that connects people through adult recreational sports leagues and corporate team-building events. Kristi has completed eleven small acquisitions, making her a prime example of how small businesses buy other small companies.
You’ll discover:
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What small business acquirers look for in potential acquisition targets.
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How to prepare your company to attract the right buyer.
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Strategies to protect your interests and negotiate from a position of strength.
P.S. This episode is part of our Inside the Mind of an Acquirer series and is designed to give you a behind-the-scenes look at how acquirers think and operate. Below are links to the other episodes in the series:
The Inside the Mind of an Acquirer Series
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Inside the Mind of a Service Business Acquirer with Jason Swenk
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6 Things to Know Before Approaching an Acquirer with Touraj Parang
Quote of the Week
“Every deal we’ve done, not a single one of them has had a for sale sign. These are not deals that I used an agent to find; it’s all been cold outreach.”
– Kristi Herold, founder of Jam, describing how she finds companies to acquire
Deals
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NWL, Inc., a private New Jersey-based company that supplies power products to industrial and military customers, has been acquired by AMSC (Nasdaq: AMSC) for $61.4 million. AMSC, a provider of large-scale power systems for grid stability and Navy enhancements, paid $25 million in cash and issued 1,297,600 restricted shares of AMSC stock valued at approximately $31.4 million. An additional $5 million cash payment will be made by AMSC, subject to conditions in the purchase agreement. NWL’s operating margins were around $6 million, resulting in a valuation of just over 10 times operating margins.
