Matthew Hultquist’s Post

What questions do we ask when looking to acquire a business? 🙋♂️🚧 - Is it a good business? ✅ - We look at historical returns on capital (EBITDA or Net Income divided by Capital required to run the business). 20% is good but one we just bought is 100%+. A capital-light business with high net margins leads to significant free cash flow to invest in growth and acquisitions. - Can we buy at reasonable valuation? ✅ - 10% yield on earnings is attractive, or operating earnings divided by enterprise value (EV). The S&P 500 trades at a 4-5% yield, bonds trade at 4-8% and small businesses can trade at 10-20% yields. The businesses we are buying trade at 25% yields with little to no growth. Our team believes we can grow net cash flow by four times (4x) in 5 years, making returns quite attractive. - How can we add value? ✅ - Do we understand the business and operations? Can our backgrounds, capital, network and partners add to business development, talent bench, accretive acquisitions and growth of the platform. We believe so. We will add experienced professionals to our Advisory Board to accelerate strategic growth. Join Us. 🛻🚜✈️ Email Matt@HillandaleAdvisors.com or Register for Private Business Roundtable. Hillandale Advisors Private Business Roundtable https://lnkd.in/ddfDABu4

Private Business Roundtable

Private Business Roundtable

privatebusinessroundtable.com

Hey Chris Kinner, CJ Casselli, Mark Williams and other business hunters - what else is on your top 3 question list when buying a business?

To view or add a comment, sign in

Explore topics