Too Much Focus on Exit Multiple / Price
I know that this may sound counter-intuitive, but price (or exit multiple) is only one component to a transaction and is not the most important. I am fond of saying, “I will pay you 25x your EBITDA, if you let me structure the deal.”
I would argue that the deal structure is the most important feature of any transaction as the deal structure dictates how cash, equity, and cash flow from JV equity is delivered to you and your estate. In addition, today’s deals are far more complex that historical deals, with a lot of the enterprise value held in the various equity offerings of each individual seller.
Understanding what the triggers are for these equity offerings, and what exiting said offerings consist of is a critical component in realizing the full value of your deal.
Because of our extensive background in investment banking, our process mirrors that of many of the largest investment banks in the world. Each time we take a deal through a Marketed Sales Process, we receive a wide range of offers with a plethora of differing deal points and structure, including but not limited to: