In business since 1991 with a focus on staffing industry M&A, we’ve brought hundreds of transactions successfully across the finish line and we‘ve seen our share of ones that died along the way.
Reasons to Sell
There are many good reasons for selling a staffing firm. Many Sellers are thinking about retirement or at least liquefying what is often their largest asset so they can take some chips off the table. Some Owners, as they age, become more risk averse and are reluctant to continue to invest their retirement funds to grow their business.
In the M & A lexicon, EBITDA is often used to help value businesses. A simple definition, familiar to most in the field, describes EBITDA as Earnings before Interest, Taxes, Depreciation and Amortization. Remember, Multiples, in the Staffing Industry are most often applied to EBITDA.
Companies acquire for a broad variety of reasons. Some acquire to:
- Increase market share
- Create economies of scale
- Offer new services
- Generate new sources of revenue and profits
- Acquire management
- Bring in fresh ideas
- Enter new markets
“I sold my business for a Ten Multiple.”
We hear this, or something close to this all too frequently. A 10X is possible (although as of 2019, highly unlikely), but to truly understand what this lucky person allegedly received, we have to know: