This also got me thinking: Who is the buyer and seller? Or really, why the sale is taking place. I’ll start.
Seller got injured, unlikely to return to climbing towers. This in parallel with a focus on a sister business that’s more exciting in their current situation, and is capturing their attention to the detriment of [W]ISP. Buyer can more reasonably coordinate frequencies and technologies and there’s a decent mesh. Buyer looking at what is the ‘amplifying’ effect of having a unified fabric across a service area, more POP’s, easier to backfill in order to concentrate on specific projects, like fiber to an MDU or some such. Buyer doesn’t have to upgrade much or any of their systems to onboard Seller’s customers, just helps scale. And then there’s the due diligence, I feel like in some ways we’re shinging a bright light into their closets, which feels overly personal really, but necessary. “Oh, I’m sure they’ll assign that contract”. Sure. Let’s have a look at that contract and contact them. Stuff like that. > On Dec 15, 2024, at 3:42 PM, Ken Hohhof <khoh...@kwom.com> wrote: > > 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 > Intelligent Computing Solutions <http://www.ics-il.com/> > <https://www.facebook.com/ICSIL> > <https://plus.google.com/+IntelligentComputingSolutionsDeKalb> > <https://www.linkedin.com/company/intelligent-computing-solutions> > <https://twitter.com/ICSIL> > Midwest Internet Exchange <http://www.midwest-ix.com/> > <https://www.facebook.com/mdwestix> > <https://www.linkedin.com/company/midwest-internet-exchange> > <https://twitter.com/mdwestix> > The Brothers WISP <http://www.thebrotherswisp.com/> > <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 > > -- > AF mailing list > AF@af.afmug.com > http://af.afmug.com/mailman/listinfo/af_af.afmug.com
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