From what I hear, the SBA has just increased the amount borrowers can access through a combined SBA 7(a) + 504 structure from $5m to $10m
Doesn't affect us here in the UK, of course, but what do you US folk think about it?
Forget all the 3x EBITDA and 5x EBITDA you see bandied about.
That's chicken feed.
Some will say that 100x is impossible. It's not, I promise you.
You'll hear comments about how such high multiples are only for exceptional tech businesses with recurring revenue etc.
Nonsense!
Anyone can get 100x.
All you've got to do is reduce your EBITDA to £0.01 and I'll give you a whole list of no-money-down buyers who'll be delighted to pay 100x.
This is for all those sellers drooling over big multiples they see quoted in the press! 😉
That's not the reality for smaller businesses and, in any case, those multiples on their own are meaningless without sight of all the other terms of the deal.
I came across reviews for a well known UK business broker who, I know, has absolutely diabolical service.
They really are rubbish. But the reviews are all 5 star reviews! Then I discovered this in their standard contract:
If anyone's unhappy with their service, they can't post it online. They can post an online review if and only if they are happy with the service.
What looks like an innocent confidentiality clause is actively used to prevent clients from leaving negative feedback anywhere!
So this broker looks like a 5* broker when, in reality, they are one of the worst in the UK.
Is it common to have such a clause in broker contracts in other places like the US?
Acquirers seem to be all chasing the same deals.
And it shows.
Over the last few years, I’ve spoken with dozens of buyers. Most are using the same playbook:
- chasing business brokers;
- trawling marketplaces;
- cold outreach to owners;
- looking for distressed signals.
All perfectly sensible.
And all highly competitive.
But very few are looking where some of the most interesting opportunities actually sit:
- corporates divesting non-core divisions;
- private equity firms quietly offloading underperforming assets; and
- businesses being forced to sell through regulatory intervention.
These are not hypothetical.
Large corporates are actively reshaping portfolios - shedding divisions that don’t align with core strategy, particularly as capital is redirected into tech and AI.
PE is sitting on a backlog of assets held far longer than planned. Some of those will be restructured, some refinanced, some sold.
And then there’s the like of the Competition and Market Authority (that's UK only but there are equivalents in other countries).
Structural remedies - ie., forced divestments - continue to be used to resolve competition concerns. Last week CMA announced investigation into the Vandemoortele / Delifrance deal as a current example (for the former to sell off the latter's UK laminated dough business), and there have been several others in recent years.
These situations often create:
- motivated sellers;
- less crowded processes; and
- occasionally, better value.
Yet most acquirers never even see them.
Because by the time they hit the open market, the advantage is gone.
So the real question is this:
How do you get in front of these opportunities before they become widely marketed? (I'm not in the market to buy a business. I'm simply seeking your thoughts / a discussion)
In 1998, Volkswagen “bought” Rolls-Royce for £430m.
Or so they thought.
What they actually acquired was:
- the factories
- the staff
- the inventory
What they didn’t buy?
The Rolls Royce name.
That sat with the aerospace business.
So VW spent £430m… and didn’t end up owning RR.
Now here’s where it gets interesting.
BMW bid £340m in the process.
Not because they wanted to win.
They just wanted VW to pay more and knew that VW would put in a higher bid.
Once VW “won”, BMW quietly went to the aerospace division and bought the Rolls Royce brand for £40m.
Result:
- VW spends £430m and ends up with Bentley
- BMW spends £40m and gets Rolls Royce
That’s not bad execution.
That’s understanding what’s actually being sold.
And more importantly - understanding what the other side thinks they’re buying.
I see versions of this mistake all the time in SME deals.
Buyers and sellers focusing on:
- revenue
- EBITDA
- multiples
…while missing what really matters.
In M&A, the headline deal is often the least interesting part.
The real game is hidden underneath. 😉
Corporate Finance / Advisory Firm required to handle the sale of a £1m+ EBITDA business in the Renewable Energy sector.
(Buyers, do NOT contact me, I'm not interested in speaking with you or putting you in touch with the target.)
I’ve been instructed to help a client identify the right adviser to run the sale of their UK business.
High-level:
- +£1m in profit before tax;
- +£5m in net assets on B/S;
- +8 years established;
- strong growth profile;
- full management team in place, no reliance on owner;
- realistic seller price expectations.
I’ll be approaching a number of sector specialists (e.g. Gneiss, Alexa Capital, Portland Advisers, Augusta & Co and about 20 others) as well as broader firms with recent, sector-based deal experience (e.g. Canaccord, Cenkos and 25+ others) even if this business is too small for some of them.
If you’re sector agnostic but have recent, relevant energy transactions, feel free to get in touch. I can share a teaser, subject to the following:
- you've completed energy sector deals within the last #24 months;
- these were sell-side mandates (not fundraises, not buy-side);
- your role as lead adviser can be verified and
- transaction size was > £5m
For clarity: my clients pay my fees. I don’t take commissions from advisory firms. The role is to identify the adviser BEST suited to this client, not just an adviser.
Thank you.
