Selling Small Businesses

Specialty International Eyewear Retail Brand - Case Study

Summary:

This specialty international eyewear retail brand came to us with operation channels across the world, including Amazon Japan, Europe, North America, and wholesale channels in China, Saudi Arabia and Canada.

Their non-prescription reading aids allowed them to become a well-established online company over the past four years with a very strong sales history, profit growth and customer consistency. One of the most appealing factors about this company listed at an asking price of $4.2 million was that the company operated on a 100% stock and ship platform to be able to fulfill orders all over the world and had an extremely strong repeat customer rate.

Solution:

Established in 2014 and currently operating with three employees, Website Closers was able to take the personalized nature of this company and present it as a powerful company for sale to receive an offer early on.

Health & Wellness eCommerce Brand Retailer - Case Study

Summary:

This e-commerce retailer was previously operating under two different private label brands in the health and wellness category, with a focus on evergreen long-term products. The company had already achieved $2.3 million in TTM earnings with a 135% plus year-over-year sales growth.

The company was offering 28 different consumer products sold under its brands operating on sales channels on Amazon in the United States. With two employees, a strong track record since 2015 and an asking price of $10.5 million, Website Closers was able to step in and help this company achieve options for sale quickly and effectively.

Solution:

The company was sold, thanks to the savvy negotiating power and insight of Website Closers.

Health & Personal Care Company - Case Study

Summary:

Website Closers was instrumental in helping a health and personal care company with a strong track record in e-commerce and on Amazon FBA to bring in multiple offers on their $47 million asking price sale.

With a gross income of over $62 million and a cash flow of $8.7 million, 15 employees working in this company were helpful in driving revenue for 95% of the business through health and personal care categories. With a solid value proposition based on strong month-over-month and year-over-year growth, the large infrastructure of the company and limited SKU concentration made it appealing to list the company for sale quickly.

Solution:

Website Closers was able to leverage all of the unique aspects of this company to make it as appealing as possible to prospective buyers and to bring the company to the closing table sooner than expected.

Website Closers Assists Custom Fashion Jewelry Brand with 500+ Retailer Connection to Sell Company Successfully – Case Study

Summary:

An e-commerce retailer in the jewelry industry with over 12 years of experience focusing on women’s designs recently came to Website Closers with the goal of listing their company effectively.

The company had numerous immediate growth opportunities available with 25% of their sales coming from a wholesale channel of more than 500 retailers and significant traffic generated through organic means online and social media. The average selling price for each order was $72, making it a very low risk opportunity. The company had a gross income of $8.9 million and an asking price of $13.5 million when the business came to us.

Solution:

Having strong roots since 2012 and a current total of 15 employees on staff, this was an excellent opportunity for a solid down payment with consistent revenue based throughout the holidays occurring all across the year.

Are you ready to work with the professionals? At Website Closers, we know how to maximize your income potential when selling your business, whether you’re an Amazon FBA seller, tech, or the digital space. We build a sales plan based on your biggest potential and target the right buyers due to our extensive network.

Fitness & Sports Gear – Case Study

Summary:

There’s no doubt that sporting goods and compression gear have become increasingly popular, and therefore, competitive amidst the online market.

A company with a strong sales platform on the Amazon.com USE Commerce Channel was experiencing year-to-date year-over-year growth of more than 1000% of their top line sales.

Five different proprietary brands were bundled under the different sub categories for this consumer brands portfolio company. With a lead focus on the Amazon e-commerce sales channel, this was a perfect opportunity for a buyer looking to leverage Amazon’s massive traffic. The company also had online marketplace traffic from Jet.com, eBay.com, and Walmart.com in addition to brick and mortar retail support. The company was previously leveraging the fulfillment by Amazon logistics model making it an ideal opportunity for a new owner to step in and capitalize on past success.

Solution:

The company’s asking price was $8.5 million with a gross income of $8.9 million, cash flow of $2 million and four employees. The company had number one bestsellers within the product mix, strong numbers, high growth and proprietary product lines. Website Closers was able to help bring this company to a successful sale faster and easier than anticipated.

We know how to navigate many of the common challenges in negotiations and we’re here for our sellers from day one to the close.

E-Commerce Retailer Uses Website Closers to Expand on Massive Growth Opportunities – Case Study

Summary:

The women’s fashion space is especially competitive, meaning that it takes a company that must be able to stand out in the right way to attract prospective buyers.

An online retailer in the women’s fashion space recently came to Website Closers, balancing their solid platform for opportunities to launch new assortments and products for women while staying on-trend.

The company was developed from fore growth from the beginning and had virtually zero SKU concentration. This was an appealing buy for a prospective purchaser because no one product sold by the company represented greater than 2% of sales. The business stood out among various listings with Website Closers and deserved a strong growth multiple leading to its asking price of $30 million.

Solution:

With a cash flow of $5.8 million and a gross income of $18.55 million and 40 employees, this was an outstanding opportunity for someone to step in and continue the growth trajectory already started by the previous company’s owners.

Website Closers experts bring an analytical and motivated approach to working with each individual seller. We know how to capitalize on your strengths and ensure that your business sale opportunity is seen by the right buyers at the right time.

eCommerce Retailer – Case Study

Summary:

This eCommerce retailer presented with 35 brands and a powerful lead on the worlds largest eCommerce platform, Amazon.com.

The target was a highly private sale of a dynamic retailer with over 150 employees and 35 consumer product brands in various categories, including Health & Beauty, Personnel Wellness, Pet and a number of others. The company was continually growing every month since inception and it was 3 years in business when it went live on market. With $12M in projected earnings for the then next 12 months and $8M in realized LTM earnings, the companys offering multiple was over 10X LTM. However, because of the growth rate, by the time the business closed 5 months after going on the market, the LTM multiple had come down to 8X. Generally, eCommerce companies at this earnings level tend to trade at 6-8X LTM earnings.

Solution:

We had a massive response to this transaction – which was entirely private and only offered to our VIP buyer list. Within 30 days of going on the market, a term sheet was signed by both parties. The terms of the deal included a 75% purchase of the shares of the company and a 25% roll of equity. On the 75%, the structure was 60% in cash, 10% in promissory notes and 5% in a consulting agreement. The ultimate buyer was a small family office that offered ownership the opportunity to exit out of their shares at 10% per year starting in year 2 (put clause). Distributions were also shared with all shareholders after closing. One thing that was intriguing to the seller about this particular buyer was that the buyer had a number of brands off of Amazon that they wanted to get into the Amazon ecosystem, so part of this transaction also included a side / bonus deal for the seller to help the buyer on other product lines other than those sold for a profit share opportunity. This represented a massive opportunity for the seller and in the end proved to be even more fruitful than the sale itself.

SaaS Provider of Business Management Software – Case Study

Summary:

This BSM company presented with high LTVs, strong KPIs and a very low risk profile for the space, making it a very attractive acquisition target.

The target was a Business Management Software provider with over 2,000 active clients and growing. The company was primarily comprised of a collaboration tool used to manage all parts of a business, including the creation of structures to plan team workload, manage projects, clients and more.

This SaaS company presented with extremely strong financials, roughly $7M in sales, the majority of which was recurring revenue ($580k MRR) and a CAGR of over 40%. Additionally, projections on this beast of a company triggered at 30% go forward, pegging it at a strong $3.5M recurring discretionary earnings run rate. The business was taken to market based on its top line and growth and was valued at $40M.

Multiple offers were received on this business. The ultimate buyer was a strategic player already in the space. This acquisition allowed the buyer and seller to cross sell offerings to each others clients, all without increasing SG&A, a true economies of scale opportunity through M&A.

Solution:

The buyer was assisted by the team at Website Closers as a sponsor in the capital markets. We introduced the buyer to a number of banks, private equity groups and Mezzanine lenders that were interested in taking debt and equity positions in this business. In the end, the acquisition structure was a sale of 70% of the stock of the company with 30% as rolled equity. The 70% was structured as 50% in cash, 10% in promissory notes and 10% in a one-year hold back. In addition, the owner of the company continued with the buyer as an adviser with a healthy salary, continued distributions and the opportunity to exit his 30% down the road. The purchase agreement included a put clause to exit in 5% increments starting in year 3.

eCommerce Brand – Case Study

Summary:

An exciting eCommerce company came to Website Closers with a strong growth rate and attractive repeat customer rate.

This eCommerce Company was well positioned both on Amazon and on its Magento Website, representing a 60/40 sales channel mix with only 30% of traffic via paid media. The company also presented with strong KPIs with respect to its brand presentation in social media which helped tremendously with its organic traffic/conversion metrics. Combining the strength of the brand given the stickiness of its customers with a mix of sales in and outside of Amazon helped to elevate the asking price for this business.

With earnings at roughly $800,000 over the Last Twelve Months and a 30% YOY Growth Rate, the company was well positioned for a strong asking multiple at market. Representing a 5X multiple on LTM and closer to a 4X multiple of future twelve based on the then-current run rate, the valuation was sound and resulted in 3 strong offers right out of the gate (less than 2 weeks).

Solution:

The suitors for this business were varied. The ultimate buyer was a professional from Corporate America looking to exit out of corporate life and to become an entrepreneur – the true American success story. Her buying strategy was to team up with the lending partners at Website Closers to purchasing this strong business with $400,000 in cash down, a seller promissory note of $600,000 and a bank loan of $3 Million. With annual payments at just under $400,000 per year, given the growth rate of the company, given the large amount of inventory included in the sale, and given the working capital loan provided by the lender, the buyers down payment was paid back in 9 short months – a 100% ROI in less than 1 year. This buyer was able to continue to grow the company using the working capital line of credit provided by both Amazon and the lender and is now preparing her business for an exit through Website Closers with a planned hold period of no more than 5 years. If the business continues to grow 30% YOY, resulting in earnings closer to $2.5M by the time the deal goes to market, and assuming the company is sold for a modest 5X multiple, this business would be on the market for $12.5M, which after paying down the balance of the loan used to buy the business and paying long term capital gains on the balance (after expenses and basis), then a business that this buyer purchased using $400,000 allowed her not only to get paid back in 9 months, but also created significant cash flow for her family for 5 years and significant wealth when sold, an estimated $8M in total net deal value at the time of closing, after all taxes and fees – this is a 20X return on the original $400,000 investment.