Printing Money in the Liquidations Industry - Acquisitions Anonymous episode 167

Acquisitions Anonymous - #1 for business buying, selling and operating

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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Additional episodes you might enjoy:

#166 - A legal tech business doing $7mm a year
#165 - Should we buy this airplane ad business?
#164 - Annual Report Filing Software
#163 - Make $2.3M/yr owning a Flight School
#162 - Cleaning up crime scenes for big money!
#161 - How to spot red flags in eCommerce listings?

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