Michael Girdley (@Girdley), and Bill D’Alessandro (@BillDA) review a business that liquidates old voice-over IP telephones. They have 32% margins and only 11 employees while doing $4M in revenue. Impressive.
We also steered away from the deal to talk about how to convince a broker that you’re not a tire kicker, how to make deals with celebrities, pricing a business with upcoming unforeseeable risks, different structures to share risk with the seller in a deal, and much more!
Company: Highly Profitable Supplier of Used & Refurbished Telecom Equipment
Location: United States
Stated Financials: Revenue ‘22 $ 4,000,000 | ‘22 Adjusted EBITDA $ 1,300,000
Asking Price: Contact the broker
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Show Notes:
(0:00) - Introduction
(0:57) - Our Sponsor is Cloudbookkeeping.com
(2:25) - Update on Michael’s Spanish lessons
(4:52) - Deal & financials: Highly Profitable Supplier of Used & Refurbished Telecom Equipment
(6:05) - What do these guys do?
(7:00) - How might Covid have affected this?
(8:48) - What do we think about the customers and the operational structure?
(15:56) - How to convince a Broker that you’re not a tire kicker?
(18:58) - What happens when you try to make a deal with a celebrity?
(20:44) - What is the elephant in the room for this deal?
(21:18) - Are there headwinds for this? Should you be scared about it?
(24:05) - How would we price this business, and why?
(25:30) - What is the most important thing of Due Diligence for this business?
(27:05) - Audience request: How would we structure this? What are the depreciation benefits?
(30:52) - What are the challenges to estimating the risk here? How would we split the risk with the seller?
(33:26) - Why are entrepreneurs in liquidations so rich?
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