Sorry, I don’t have an answer to your question, but I do have a few thoughts.
One, I remember long ago taking a business school class that covered M&A, and it stressed that acquisitions typically happen when the assets are worth more to the buyer than the seller. Many ways this can happen, like you may have synergies that lower costs, or additional products and services you can sell to the customers, or economies of scale, or a way to repurpose assets like real estate. You may be looking a acquiring a company with low EBITDA but your existing staff can take over all sales, installation and support and you won’t need their people. If they have office space, you may not need that. Two, at this point in time, I don’t think you can value an ISP (especially a WISP) without accounting for BEAD but also the new administration. My gut tells me you need to look short term, especially with a WISP. You are buying a revenue stream, I would look at revenue or free cashflow over the next 1-2 years in addition to EBITDA. Three, it depends on whether we are talking a cash sale or some sort of seller financing. Deals are done for something like seller gets X% of the revenue for Y months. That also allays some fears of overstated customer count or revenue numbers. If you are willing to pay cash, I would expect the seller to demand less because he’s probably not going to get a lot of cash offers. More likely seller financing or stock swap. From: AF <af-boun...@af.afmug.com> On Behalf Of Mike Hammett Sent: Sunday, December 15, 2024 2:40 PM To: AnimalFarm Microwave Users Group <af@af.afmug.com> Subject: Re: [AFMUG] KBB for multiples? As someone about to be stepping into acquisition mode, I'd like whatever resources people have in that realm as well. Well, I mean even with "straight EBITDA", surely people are still discounting or adding on attractive or unattractive variables. There are a ton of things that can affect value that don't show up in financials. ----- Mike Hammett <http://www.ics-il.com/> Intelligent Computing Solutions <https://www.facebook.com/ICSIL> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb> <https://www.linkedin.com/company/intelligent-computing-solutions> <https://twitter.com/ICSIL> <http://www.midwest-ix.com/> Midwest Internet Exchange <https://www.facebook.com/mdwestix> <https://www.linkedin.com/company/midwest-internet-exchange> <https://twitter.com/mdwestix> <http://www.thebrotherswisp.com/> The Brothers WISP <https://www.facebook.com/thebrotherswisp> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> _____ From: "Dev" <d...@logicalwebhost.com <mailto:d...@logicalwebhost.com> > To: AF@af.afmug.com <mailto:AF@af.afmug.com> Sent: Friday, December 13, 2024 12:03:41 AM Subject: [AFMUG] KBB for multiples? Okay, there’s no such thing as Kelly Blue Book for valuing multiples if you’re acquiring a [W]ISP, but is there some kind of guidelines, like we’ve already established a negative multiple for obsolete PMP 320’s, but what are 450’s worth per sub? What about Tarana G1/G2? Fiber is sort of more knowable. I guess UBNT is probably pretty low. Someone has to have guidelines/rules of thumb, in case you choose not to do straight EBITDA. -- AF mailing list AF@af.afmug.com <mailto:AF@af.afmug.com> http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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