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Message Subject: selling a tackle company

guest

Posted 1/13/2008 7:44 PM (#293844)
Subject: selling a tackle company

How does one go about buying/selling a tackle company in regards to price? Is there a formula to use to get an approximate value?
Thanks for your time

sworrall

Posted 1/13/2008 11:44 PM (#293906 - in reply to #293844)
Subject: Re: selling a tackle company

Posts: 32886

Location: Rhinelander, Wisconsin

The same way any company is valued. Inventory value, sales, and bottom line.

Tackle Industries

Posted 1/14/2008 6:04 PM (#294097 - in reply to #293844)
Subject: Re: selling a tackle company

Posts: 4053

Location: Land of the Musky

7 times net profits is a good place to start. If you think it will grow then you ask for a little more and if not a little less. Also depends on brand if you have one. A lot goes into it. I have a small non-lure company that I make $10k EAT. I would sell it for $50k with my inventory (~$5k) right now. Not worth my time right now with other things going on. If it was worth my time I would ask $100k and see where the negotiations went.

JMO
James

RiverMan

Posted 1/14/2008 7:37 PM (#294117 - in reply to #293844)
Subject: Re: selling a tackle company

Posts: 1504

Location: Oregon

Seven times? I have always heard three times.

Jed V.

ShaneW

Posted 1/14/2008 8:05 PM (#294124 - in reply to #294117)
Subject: Re: selling a tackle company

Posts: 619

Location: Verona, WI

I used to do this for a living and 7X is a place to start but then you work from there. Barriers to entry, brand strength, patents, distribution channels, agency costs, etc. all play a part.

Shane

Tackle Industries

Posted 1/14/2008 8:49 PM (#294130 - in reply to #293844)
Subject: Re: selling a tackle company

Posts: 4053

Location: Land of the Musky

7x is what I was taught but that is also for non-lure companies. I work for a huge company and have known what has been paid for some others and 5x-10x EAT is typical. But again, those companies are worth 10million to 1 billion. Not sure if the same rules apply to tackle companies worth $50k-$500k in the sporting goods market? I hope to find out one day!

I will post back then with my findings...

guest

Posted 1/15/2008 10:02 AM (#294203 - in reply to #293844)
Subject: RE: selling a tackle company

it is a multiple of EBITDA = Earnings before Interest, Tax, Depreciation and Admortization.

on average 3.5x - 5x EBITDA. Securing finaning for a purchase of a company would require quality company assets or a guarantor with a strong PFS.

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