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Asking Price:  $ 3,200,000 + SAV

Sale Price: $ 3,050,000 + SAV​

NDA: 16

Offers: 2

On Market: 5 months

Revenue : $ 3,900,000

Ebitda: $ 810,000

Employees: 10 including 6 family members

Lease: The Vendor was the landlord so a new lease was negotiated


Q: How many enquiries were made?


We received 38 enquiries on this business in just over 3 months. Out of these we qualified just 24 and then went on to hand out 16 non disclosure agreements. After the offer was accepted it took another 9 weeks to complete the contract stages.


Q: How was the deal structured?


This was a straight out purchase with the full purchase price paid on settlement. The Vendor agreed to leave $100,000 in escrow for a 12 month period, in case there were any hidden liabilities or surprises


Unique business stats:

Customer number 1% of sales: 26%

Key staff members: 6

Growth without further capital investment: 150%

Plant and Equipment at  written down value: $450,000


Q: What challenges were there?


This was an exceptionally well run and highly efficient business. However it had been family run for almost 30 years. At the time of divestment, there were 6 family members working in the business (out of 10 employees) that were all exiting the business. We negotiated several consultancy agreements for the family members to remain working in the business for 12 months, to allow a smooth transition. It was really important for the Purchaser to feel comfortable regarding this to avoid a less favourable risk assessment, and a lower price.


Q: How was the customer retention?


From very early on in the process, we identified the key customers and worked out a strategy with the Vendor to deal with customer introductions to the Purchaser. Like most family businesses, a lot of the Customer trade terms are built on hand shakes and relationships that go back years. It was really important for not just the Purchaser but the Customers also that the introduction was handled sensitively and ethically. At the same time, we also made a point to the Purchaser to factor in a Customer retention loss. We find they key is to manage expectations from the beginning of the process. In the end 92% of customer completed the transition, which was 2% higher than we asked the Purchaser to factor for, so they were happy.


Dan Levitus 

(m) 0450 326 146

(t)   (02) 8923 2632


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