The academy call kicks off with a warm greeting, updates on Carl’s family trip, and his enthusiasm to reconnect with the group. The focus shifts to an acquisition deal submitted by Will, involving a Midwest-based distributor of building products catering to commercial contractors. The business has seen impressive growth since 2019, but questions arise about whether the surge represents a new normal or a temporary high, potentially driven by pandemic-related construction booms.

The owner, Vicky, is retiring and seeking a cash-free, debt-free sale priced at $2.8 million, with $800,000 to $1 million in surplus cash remaining in the business. Discussions explore the valuation’s attractiveness, considering strong profit margins, growth potential, and its minority, woman-owned business status, which accounts for 20-30% of revenue. Notably, Will qualifies to retain this status, presenting a unique advantage.

Concerns surface around the business’s reliance on government projects and relationships, the sustainability of its high margins, and the owner’s pivotal role. Several members suggest an earn-out structure to mitigate risks associated with revenue volatility and market downturns. Key advice includes negotiating surplus cash inclusion, analyzing profit-sharing arrangements, and examining the business’s core relationships.

Community members commend the deal’s valuation and growth trajectory while emphasizing due diligence in verifying financial consistency. The general consensus is optimistic, with a “green light” to proceed, though caution is advised regarding economic shifts and ensuring continuity with clients and contractors.

Will’s potential acquisition is widely viewed as a solid opportunity, with members noting its lean operations, market positioning, and favorable financial structure. The deal’s success hinges on securing equity, confirming the revenue base’s sustainability, and addressing any dependencies on the retiring owner.

Full Transcript:

Happy Thursday, everybody. I missed you guys last week.

I promised my wife last Thursday that I would go on this trip that she’d booked, and would not come on the, on the academy call. And, yeah, I didn’t have as much fun on the family trip as I would have done if I was hanging out with you guys. So, so great to see you all again. Great to see Clive sporting that retro England shirt. That’s from, like, two thousands, I think, Clive, when we we booked Germany five one away. I was at that game. I was wearing that very, very shirt.

I’m good. See you. Yeah. I know. Good to see you. We got David Jarrell. We got Otis, Tyrone, Sam Davis.

Loved your testimonial.

In Facebook, we got Lewis, David Vario, Lorenzo, Steve, Jonathan Walters, Jare East, who I spoke to earlier on today who’s doing something, like, really, really cool. We’ve got Toby Carmen, John Shefflin. I love John Shefflin. He’s so cool. Jerry Barber. How you doing?

Leo Rich. Too many other people. Have we got John, and have we got Sarah? John, are you on?

No? John McElroy. Where are you, my friend? Don’t see him. Alright. Well, I’ll just keep talking for a little bit.

So, you had a great week on vacation.

It’s good just to down tools and do some stuff back into zone. Lot of really cool stuff going on where, we’re we’re ramping up the production for, for the Kings of Deals program.

Looking forward to the Protege call on Monday. I’m gonna be doing that mindset training that I built, just before, Abraham, decided to come and do that. How cool was Abraham great with those letters? And it’s great to see you guys implementing some of that stuff.

Like, Toby with his little kind of e j is going into the letters and stuff. I can’t remember who it was. Somebody had I saw on Facebook, those bird letters stay with targeting, like, fire companies and stuff. I thought that was, like, really, really cool.

So it was, that was good. So that that was Anibal. Yes, sir. Anibal Moran, you legend.

And, John, good to see you. How are you doing? Excellent. Fantastic. Yeah. I watched the replay for last week.

The deals were really interesting.

I do miss these calls.

I miss these calls a lot. So, you know, when when I’m not on a plane, not being dragged off by my family on a trip, in a boring museum, came to me last week. It’s good to be on these calls. So, lots of activity in Protege.

You know, Clive stops the leaderboard, obviously followed by Ybi Wo. And if Toby’s up there as he always is, and a lot of other kind of similar familiar faces, David, Vario, David, Joel, Lewis, they’re all up there. So, so nothing else, for me to announce, John.

I don’t know if you wanna plow straight into the deals. I know we’re always a little bit shorter time to kinda get the three deals in.

No. I understand we’re flying solo, this week. Sarah’s, there’s a way.

So Sarah’s so Sarah’s in Alabama, inside of the new business that I just bought with her and, and Chris Moore.

So we bought a bowling alley.

I asked her to send me some pics.

I don’t know if she did or not, though.

Yeah. I was on a call with them this morning, and they’re freaking bowling. I’m like, for you, like, setting up a b c x y z, we just hired a GM for onboarding him. It’s a it’s a really, really cool business.

So we took ownership of the business. And in the first weekend, broke the record with with five sales on a weekend every in the business. Like, we’re gonna absolutely blow that thing up like crazy. So one of the really cool things I don’t know if I talked about this.

One of the cool things we’re doing is in America, you got this big chain called Dave and Buster’s. Have I talked about this before? Yeah. Okay.

Alright. Well, so we’re doing that. We’re I didn’t like the Dave and Busters style arcade thing inside of the business.

So, literally, you know Chris Ford. He doesn’t mess around. He’s in there within a day. The walls were down.

New stuff’s going up. He’s already on the phone to the machine rental company. Like, all that stuff in order, and it’s all coming in. So I was in there wizarding all the books and processes, merchant accounts, hiring the GM, and, doing all that stuff.

Sad thing is it’s gonna be mid November before I get to go there. I’ve been at the bowling alley. I’ve bowled in there. I’ve met the previous owner.

I know all about the business, but, so I’m traveling so much right now. I’m going to Australia in the next week, a couple of weeks. Hence, why we’re moving the calls a bit later, so I could be on them. And, it’s, it’s gonna be mid November before I, before I get down there.

So, you know, it is what it is. So what we’ll do, John, if you want, is trade me off with, our coaches in here. So so Toby, Wayne, if he’s on, Jeremy, if he’s on, Ali, if he’s on. I know Eric’s on the call.

Happy for you to trade me off with some of those people or Or some of our resident superstars, not yet coaches, but have, you know, have done deals and always have great insights like like Cole Brown and David Gerault, David Vario, and Chuck, and, JR, and Carmen, and Otis, and all those guys, and Steve. So, we’re happy for you to kinda run it the way you wanna do it, but I’m happy to go first on all the deals if, that’s what you want.

Sounds good. Yeah. Well, we’ll get lots of people involved. We have three interesting deals, so, yeah, let’s get at it.

I better pronounce my note sheets. I’m not organized this week.

I can tell you I can tell you’re not organized because we don’t have the share screen going.

Yeah. I know.

You could tell I’m rusty. I missed a week. I’m rusty. Right. So I’ve screen shared.

I’m gonna print notes templates. Templates. Guys, if you’ve not got the red light green light notes template that I use, when I’m making my notes on deals, I uploaded it into the Facebook group. So definitely download that.

It’s a great way that you can, kind of organize your thoughts before you vote on a on a particular deal.

1. We do have, a few newcomers. We’ve already had a couple people say hello in the chat, so to have you aboard. This is our red light green light call, and we’re gonna look at three deals today.

And the disclaimer just makes an important no, which is on this call. We’re not providing advice by any specific individual who’s working on any specific acquisition. All the people who submitted these deals for the most part are on the calls, but what we’re gonna talk about really isn’t advice. We’re just giving ideas.

The purpose of this call is to see how experienced dealmakers look at new opportunities, questions they form, and the strategies they might potentially pursue. I mean, if we’re gonna develop an actionable acquisition plan, we would have to get in a lot more in-depth information on the charger companies and on the sellers that we’re able to review on these short twenty, twenty five minute calls. So none of this rises to the level of advice.

Now let’s go to deal number one. Let’s get the numbers going.

This is an interesting deal. I think Will’s on the call. I didn’t triple check, but I think he is.

This is called Bob Els.

Yes. This particular business is a distributor of building products. Now they’re very specific, doors, frames, hardware, toilet, and bath accessories. This isn’t residential.

They’re not putting it in your bathroom. They deal with commercial contractors only. So big projects, apartment buildings, you know, subdivisions, healthcare schools, multifamily renovations, that kind of thing. The trading area is in the Midwest.

They do have some regional customers, but, you know, tend to be a little bit local as well. There is no property in this deal. They lease their facilities. The ask price is two point eight million.

Valuation, I think, is gonna be a bit of an issue in this business because there is some variability. You’ll see about that in a few minutes. The business has been for sale for a few months. This business was founded in two thousand and six, headed on by the current owner, Vicky.

Yeah. She’s just kinda retirement age here. She’s a baby boomer. And like a lot of them, she wants to retire.

She owns one hundred percent of the shares of this business. It is a minority woman owned business, and that does generate twenty to thirty percent of the revenue. Now that status doesn’t typically carry from one owner to the next, but Will, does qualify for this exact same category.

He is a minority, and so the seller, Vicky, is talking to somebody she knows, who’s responsible for that to see if the paperwork could be eased in terms of going from one to the other because the intention is to keep that status when Will acquires the business. Now Vicky ran the business for many years. Recently, after thirty years of experience in the industry, she’s kinda stepping away from the day to day, hands on. She hired a new GM to reduce her load and to be the sort of point person on this business and be responsible for the overall business.

She is willing to stay in the business for six month handover period.

So Will’s negotiating that. Her motivation for sale, yeah, I think he just wants to retire, travel, get away from that day to day grind of being responsible for the business. There are seven employees in this business. That includes Vicky.

Three of them are salaried, four are hourly workers. The businesses really vary. You know, sixteen projects were mentioned in twenty nineteen, forty nine projects were mentioned in twenty twenty. I did the math, looked at the average project sizes around eighty ks, but I get the feeling that some of them are a lot bigger and then they do do some smaller projects as well.

So it’s not like they all come in right around that size.

More than fifty percent of the business is repeat business, just the same customers coming back to them year after year. They get plenty of referrals as well. They wanna sell the business on a cash free, debt free basis.

There was a pretty dramatic increase in the business, twenty nineteen. This starts at twenty twenty over here, twenty twenty one. This column here should be twenty twenty two. That’s just a bit of a typo.

And as we can see, it’s a projection. This column right here, Carl, just to kind of put you up to speed. The reason why there’s no add backs here is it’s a projection dated six well, based upon a six month run rate. So that is twenty twenty two, not twenty twenty one.

Just a bit of a typo there. The website, I’d say is average. It’s a late on content, but it does look fresh. It doesn’t look old.

It doesn’t look dated, but not as much in there as I would have hoped to see. Seller is motivated to sell. As far as I can see, not driven by any urgency or distress. There was no real concrete reason why a sale has to happen according to any timeline.

Then it gives no sense of urgency that I could detect. And this is a deal where Will has developed really strong rapport with the seller. I have a few things I’m gonna say about rapport in that context in a little bit, but I wanna first throw it over to Carl. The numbers look great.

Twenty nineteen, which is not on the board here, Carl, was a much, much weaker year. So there was a big was a big spike twenty nineteen, twenty twenty, and nowhere did I really see any explanation, right, for why we had this dramatic increase in revenue and earnings. So, other than that, it looks like a pretty good business. Will is really teen.

I hope he’s on the call because, I know he would value the, the input that you’d have on this business. So what do you think? Yeah.

I really like this business a lot, and I really like this deal. I’ve just been on the welcome call for all the new proteges that have joined in the past few weeks, and we talked a lot about the kind of home services, the kind of construction industry, which you know this business is like part of. So I think this is a great business, that’s just being fueled by, you know, due to COVID, a lot of people started doing more building and renovations and this type of business.

It’s a distribution of products for the building industry, right?

That’s right. Yeah. Yeah. Okay. Distributor of building products, but very specific. They only mention five and five alone.

Yeah. Cool. So those are all things that, have been heavily consumed, over the past two to three years. Obviously, they’re selling into the commercial contractors, not the end users, so they’ve got the right kind of route to market.

And obviously, they’re competing with a lot of, you know, the Home Depots of the world. But a lot of these these kind of contractors that are doing these jobs, they’d rather work with a lot of these small regional companies. The numbers are amazing. Clearly, it’s grown, about thirty four percent year on year.

I think maybe in twenty nineteen, they were doing more kind of larger, commercial contracts, which, yeah, they went from nineteen projects, I think, to forty nine over that short period of time. So I think they realized that, their market was being dominated more by, these kind of smaller jobs. So they pivoted to do that. The business has obviously grown very, very well.

Margins are fantastic for this type of business.

Got a few questions around the add backs. Profit sharing is an add back. Normally, profit sharing, through distributions, is done below the EBITDA line. If it’s profit sharing through, like, some form of affiliate type relationship, you know, that wouldn’t really be an adjustment, would it?

Because that would be a normal overhead or cost of sale you would expect to see.

Let’s stop here for a second, Carl, because I think this would be helpful for some people. I mean, to my mind, you correct me if you think differently. I think of profit sharing if I’m a actual shareholder as a distribution of profit that follows below the line. But if I’m an employee, I have no shareholder interest.

I’m profit sharing. That’s an expense to the business. That’s above the line. Is that the way you see it as well?

It is.

The question then would be is it can only be an add back if that circumstance is not going to reoccur and the Will’s ownership of the business. So, if it’s a profit sharing with employees as a real overhead expense that is truly above the line to correct, then, for it to be an add back, then those employees would have to be leaving as part of the deal, which would be a kind of a little red flag for me. So I want to understand that. So I think, you know, some of the add backs, of course, we need to drill into a little bit more.

Clearly, you know, let’s let’s say this business is gonna do a million dollars this year, of real cash flow with whatever our backs they put in. You They’re looking to sell the business two point eight million. Debt free cash free means that they want to take the cash with them. There’s no real long term debt.

So if they’re gonna pay down all the current liabilities, take all the cash, what I’d rather do on this deal is buy it with, you know, at least a month’s worth of revenue of cash inside of it. So there’s probably eight hundred thousand dollars of surplus cash in here, which you need to add to the two point eight million asking price. So really, that’s not part of the multiple. So two point eight million for the enterprise value of the business is a two point eight x times a million dollars of probably true EBITDA for this year.

That is a very, very attractive multiple for a deal of this size with these margins and with this level of growth. So this is a very, very strong, deal for me, Joe.

Here, let me let me ask you a couple questions, Carl, if you don’t mind. Like, I put NN here for the new normal. If this is a new normal, this valuation is fantastic. But they’ve just got a big piece of business that caused them to have such a, you know, sort of incredible sort of two year run.

I’d wanna be a little bit more careful. I think I I should have put the or at least made a reference to what those numbers were. The year before in twenty nineteen, I think it was literally, you know, they had, like, eighty thousand dollars of profit. Like, in three years later, they’re talking about one point three million.

Like, that’s the kind of jump that they had. If it is the new normal, I I agree that that valuation is fantastic, but we probably have Check that out.

Yeah. And and I think if you get into averages, I can’t see if it’s up to the model, but if you get into the averages of the adjusted EBITDA or even the normal EBITDA, you know, even I I think let’s have a look. Yes. You you’ve got an average EBITDA of, over a million. I think the two and a half times multiple at a million dollars of EBITDA with this growth and these margins, I think, is low.

But even so, that gets you close to the two point eight million asking price. The I’m gonna say this, and this is crazy. But one question I’ve got in the back of my mind is why is I think this business is underbout. How many times have we said that on these calls?

Not very often. Normally It’s not been at all. Great business, but, like, it’s free at what it’s worth. Like, way overvalued.

We’ve had some crazy valuations in the past few months. This is a business that’s not only attractively valued in my opinion, I think it’s I think it’s undervalued.

And and I I think there’s there’s multiple ways you could do this deal. I think a straight LBO would work because you’ve got so much cash. You’ve got a solid AR.

You could probably do a decent closing payment and then a sell it out. I think the SBA would be very interested in this deal.

I think at two point eight million for the business, you’re probably looking at max two eighty in in equity.

Hey, Carl. Do you think there’s any chance that that business is discounted a little bit because of this factor? I mean, the fact that Will’s gonna qualify and he’s not necessarily gonna lose that twenty to thirty percent revenue is a bit of a special situation because it’s worth noting, and I know that you know this because we’ve talked about it many times before, that is not something that you can continue. That that’s not business that can continue if you buy this business and you don’t reapply and somehow or other get this minority woman owned business status.

So thirty percent of your revenue is gonna disappear if I buy it or you buy it. If Will buys it, you know, he’s gonna be able to maybe requalify as well. But for the average person, they wouldn’t. Maybe that’s part of, why there’s a little bit of a discount on the valuation.

Yeah. Maybe. But I think one of the things you can do with that is potentially, go find a partner go find a GM that, would qualify, and then you could retain that, that additional revenue. So that’s maybe something that you would look at.

She’s just recently hired a new GM to reduce her load. Don’t know whether that person would qualify for those, those special incentives. But, yeah.

I think you have to be a shareholder.

Yeah. So I think, well, I I always mandate to make a GM a shareholder anyway just to challenge the psychology and the dynamic. So I think that that’s something that would need some further, you know, exploration.

But on paper, subject to doing some serious due diligence, I think this is one of the best deals with best deals that I’ve seen, over the past few months. This would be a massive green light. It’s not quite a golden buzzer deal.

There are a few little things in here that need kinda checking out, but, solid, solid deal will could jump.

Now what about these margins? Are these margins within a range where we kinda feel comfortable? Are these just kind of suspiciously high?

No. Not on the gross margin side. No. I think those gross margins, are about right, maybe even a little bit low, actually. I definitely wanna see something in the mid fifties to high fifties, in this industry.

I think the the bigger question for me is the overhead is so low, but maybe this is just about shifting business.

It’s an import export business, isn’t it? You’re basically buying in these things, you’re warehousing them, you’re sending them out to customers. Although there are a lot of new business models now where, you know, a lot of this stuff can be shipped directly from OEM suppliers straight into the customer, without touching this business.

So this could just be a very lean, very nimble, Well, I think it’s sometimes hard to write this all up in one page, as you know.

I think they do have some kind of design build capabilities as well. Like, so they’re not just getting a list of parts, finding them, shipping them, and and they’re being done with it. I think they’re a little bit more involved than that, that there is some, you know, some design elements to what they’re doing. You know, they’re maybe maybe a genuine subcontractor, not just a distributor. I mean, this is how it was described to me in the in the notes, distributor, but, you know, I think there’s maybe even a subcontractor element to their business as well above and beyond just being a distributor.

Yeah. Okay. So a couple of things I’m just gonna touch on from the comments and then, John, check-in with Steven, Lapland. He’s raised his hand.

I know he’s got some, some ideas in this business. But, yeah, one one of the things I was talking about is this the sellers asked for a cash free debt free deal, which effectively means that they wanna take out all the surplus cash and pay down all the debt. So they’re asking for two point eight million, for the business, but then this business has got eight hundred thousand dollars of surplus cash inside of it. And how I work that out is I I looked at the revenue.

You take roughly ten percent to one twelfth of your total annual sales. That’s the amount of cash that I want to see left in the business at closing, and I obviously want the AR to stay in the business as well. So if if you look at it, you you could probably even add a million dollars of surplus cash. Maybe I was a little bit mean.

Yeah. Well, I mean, I did the actual formula. That’s one month.

Yeah. Yeah. So you’ve got over a million dollars of surplus cash. So, really, you can give the seller that cash, plus you could jointly buy the business for two point eight because I think it’s a really sensible, valuation.

So your deal is really only two point eight million, because the seller can take the million. If this was a UK deal, the seller would take the cash at closing as part of the transaction as they get entrepreneurs tax relief, on the money at ten percent. In the US, I don’t know whether this is an s corp, John, or an LLC, or that it’s a c corp, but, in the US, in most cases, the the the surplus cash, whether it’s taken before closing or at closing, it makes not really much difference from a tax perspective. So but, yeah, do you wanna get, do you wanna get Steven’s thoughts on this and then maybe check-in with one or two of the coaches, and then we’ll, we’ll move on to we’ll vote and move on to deal two.

Violator steel a lot.

Sounds good. Okay. Steven, year on. Let’s let’s, not this doesn’t apply just to Steven, but for everybody. We keep our comments fairly brief. That gives us a chance to touch base with more people, but love to hear your thoughts on it.

Okay. Abhreesh.

So I live I have been forty years in the construction industry. In fact, I’ve been in Low History College working as a contractor.

But in the Midwest where where I live, the construction industry has been on an unprecedented highway for the last two years.

And one of the companies I run-in that industry, I have contact with all the builders in my region were Shellen Residential, and all of them are running out of high watermark that’s like a fifty percent blast that we’ve had for the last two years running. And now we’re starting to see a curve flattening as well as probably coming down. So one of the questions I would have about this business, although I love this industry, this is probably a great acquisition opportunity. I personally, if it were for me to buy, I would not go into this deal with our earn out structure because I think the volume’s gonna drop.

And the other thing is that, if it’s a minority owned business in the construction industry, and they’re saying they’re getting twenty to thirty percent because of that, that probably means that’s all government work because that’s the only place where they can prioritize it like that. And that is likely to be the schools where they’ve been somewhat unprecedented levels of referendum, referendum spending. Now that the economy is turning the voters, you’re gonna become probably more resistant to that. So in the due diligence process, I wanna flush those things out and find out how much the revenues are tied to really good long term relationships with the builders.

Because if you have good relationships in this industry, it’s golden and super insulated from not losing customers. It’s just a question of the economic swing exposure here. So that’s that’s what I wanted to say. And I can go on, but you told me to be brief, so I’ll stop now.

Yeah. No.

That’s a great thought. That’s kinda where I’m coming from too. Right? We’re on the high watermark.

Right? We’ve had this explosive growth in revenue and earnings. I’m not gonna just take it at face value that’s the new normal without doing a little bit of digging for sure. Okay.

Let’s, Is Will on the call, John?

No. I now that I think of it, I think Will told me that he couldn’t be on the call. He was looking forward to the ticket. K.

Unless you’re here. Will, are you here? I I think he mentioned that he was not gonna be here. Okay.

Do you want me to check-in with somebody else, John, or do you want me to check-in with somebody else, John, or do you want me to check-in with somebody else, John, or do you want me?

Sorry. I’m just trying to pull up the next deal here. I got a little bit distracted. Let’s go to, let’s go to Toby. Hope you got any thoughts on this deal. You know, I’d like to, like, give it maybe give us your red light green light as well and, maybe a little bit of a justification on where you’re coming from.

I I wrote down, green light fifty, which is a high green light for me because I’m an optimist, and I always think there’s gonna be a better one coming. But, and I I really like the I like the growth. I’m I’m thinking now, though, based on Steven’s comments, that that that earn out structure is a good idea. I actually thought of that when when you mentioned the the big jump from twenty nineteen.

So I think if you can get some kind of earn out, the the owner wants to stay for a little while. So or or no. She doesn’t wanna stay. She wants to leave.

And so I’m wondering how much You bet.

You still stay for six months, but that’s it. Yeah.

But I’m wondering how much of the business is based on her relationship with those contractors that are coming in and buying stuff every week, and and can you continue that?

But I but I think it’s a solid business. I think it’s a go.

Keep keep talking and make an offer.

Yeah. He’s definitely making an offer. He’s got, he’s got a few things lined up here in terms of financing. There’s gonna have to be some equity put in this deal, and I think he’s working on that. Yeah.

But Alright. Thing about Will John is, he has a family office. Yeah. Yeah. No.

You know what he does. I think he wants to do the I think he wants to do the first deal outside of his family office. Oh, does he? Okay.

Good for good for him. I think I think his instincts are right on there. But, yeah, obviously, there’s lots of flexibility for sure. Let’s, let me, let me go to John Evans.

John, we haven’t heard from you, I think, in a couple of weeks.

Anything that’s Anything that could be correct?

Yeah. I was just saying to John, happy wedding anniversary.

Kinda give us your thoughts, John. Maybe a red light or green light, a number, and and, how you came up with that. We’d love to love to get your Fire. I’m back back with you now.

Sorry. I’m working off a different tablet, and the buttons are in different places. And, I like the deal, but I think I’d try and move it away from being a cash free, debt free deal and try and use that as part of a negotiation tactic. I don’t know what the tax situation is in America with regards to the owner taking all the cash out of the business, but I know in the UK, we’ve got this ten percent entrepreneurial tax relief. So I would try and force them down that route to become more tax efficient.

But I think it’s a good business, good strong business. I like the balance sheets. I like the revenues and the growth it’s shown. I’m not sure picked up something you you mentioned there was a spike in the two thousand and nineteen, but you haven’t shown them here. I’d want to understand, you know, the essence of Lowell.

Obviously, we had the code with you, which which would increase things, but I think it’s about business.

Okay. Good. Thank you for that. Much appreciate it. Hey, again, Joel. And we’ve got time for one more.

Oh, jeez. It’s been a while since we heard from Stan as well. Stan?

Yeah. How you doing, man?

Hi. Good to hear.

Can you red green light and, a number and and it’s a tricky one with the with the, women minority thing and how that would impact if you if you bought it and you’re not, in that group.

But, but you could partner someone, obviously.

Yeah. Yeah. I mean, the the question is for me is, like, is she the business, and how much is relationship driven?

And in six years, would it be enough to have someone, going with her and being presented as a new her to, keep the business moving and growing and having the relationships.

Yeah. It was a interesting sector, impressive margins. So, I would say green light forty forty five, maybe. Okay. There’s months out there. Yeah. Appreciate that.

I had a couple of, nine one one calls with Will this week over this deal, and we obviously covered a lot of things. He’s trying to find some equity. He’s trying to find an equity partner. We talked about equity splits, you know, the kind of headwinds that you light face.

I said, but, you know, you couldn’t expect, someone coming in on an equity basis. They couldn’t expect a bigger percentage because you’re actually putting more money at risk because you’re PG ing the loan. Right? So that kind of puts some perspective in terms of the kind of equity splits people should expect coming in, you know, for the ten percent or the fifteen percent that they’re looking for.

And I guess the other thing that, I think is worth noting is having great rapport with sellers very early in the game is pretty normal because they’re not too sure whether you’re gonna come in here and write a check for the whole amount. You know, you literally could be Santa Claus. They don’t really know. And so anybody anytime you’re talking to somebody who who could potentially buy your business, especially if they if they realize that Will’s got some kind of a family office connection, that can drive a really sort of warm response that you’re gonna get from a seller or broker really early in the process.

I’m not calling them insincere, but you have to be a little bit careful, not to overvalue the sense of rapport you have very, very early in the game, especially if they’re under the impression that you might be able to come in with with a check to buy the whole thing. So, whale’s got great enthusiasm, g t on. I I like his chances of buying this business, to tell you the truth. Let’s everybody put our vote in.

I’m definitely green lighting this one, and I’m gonna go green light, fifty five on this one. So green light means we wanna pursue it. Red light means we don’t think opportunity is worth pursuing. And, of course, the number just measures our sense of conviction or how strongly we feel about it.

If we love the deal, it’s a green light one hundred. If we hate the deal, it’s a red light one hundred. We very, very rarely get deals that hit those extremes. Every once in a while, we do.

Mostly green lights though, so Will’s gonna be pleased about that. Yeah. And especially if he can, take the discount that might have been factored in there because of the minority women owned and then qualify for himself, that would just be gravy.