After speaking to 1,000 founders at over 700 brands and acquiring 5 businesses this past year, we’ve identified 3 reasons why Q1 2023 can be a great time to sell your brand.
For valuations, your post-BFCM TTM financials & overall profitability will likely be your strongest. That’s important because the higher your EBITDA $ amount, the more cash goes into your pocket…
We & virtually all acquirers of >$30M brands, base valuations on EBITDA multiples (ex 2-5x+ your TTM EBITDA). This means every additional dollar of profit generated from a strong BFCM performance is immediately multiplied by 2-5x, or more, for your valuation.
The truth is, nobody knows where 2023 will end up. Your overall revenue & EBITDA might be higher ...or it might be lower.
Despite this, M&A deals for great brands are still getting done right now (mainly via strategic & financial acquirers with dry powder). We recommend making a decision based on current market data & intuition about your business. Market data: During H2-22, closed deal valuations came down 20-30% vs last year. Intuition: What does your gut tell you about increasing your valuation next year?
Most deals we see are asset-based purchases where 100% of ownership transfers to the acquirer at deal close. This means founders are able to walk away with minimal day-to-day or transition responsibilities but keep millions of $ in their pockets...
This is really attractive for founders. In fact, we have paid millions directly to founders who have all completely exited the day-to-day. So what are they doing now? 80% have immediately re-invested the capital into their next venture.
We are acquiring, and growing, leading Shopify home goods brands on one platform; Pattern Brands, and would love to talk with you.
Like what you read?
Follow us: @ginlane
Get in touch: acquisitions@ginlane.com
Get a valuation: submit here
