CASE STUDY
How an Owner Nearly Doubled Exit Valuation without Growth
The issue
The owner could not sell the business for his target purchase price of $9.5M.
The result
After 18 months of preparation, the owner sold the business for $11.5M, with no material EBITDA growth during that period.
The situation
A residential services business was generating $1.2M of EBITDA, but the company was still highly dependent on the owner.
The owner needed a $9.5M offer to meet his goals, but his highest offer was $6.4M.
The business still depended too heavily on the owner’s judgment, customer relationships, and day-to-day involvement.
The problems
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Owner central to all key decisions
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Owner running day-to-day operations
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Owner desired transition post-close
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Personal expenses mixed into company financials
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EBITDA addbacks not tracked clearly
What we changed
Tracked addbacks
We coached the owner on identifying and tracking legitimate EBITDA addbacks, especially significant personal expenses running through the business.
Promoted ops manager
We moved responsibilities from the owner to the operations manager including all day-to-day management. Ops Manager promoted to General Manager.
Stress tested leadership
Coached the owner to travel frequently, allowing us to find & fix any issues that arose in his absence. The owner began his transition before the deal closed.
Results
1.8x
value increase
18
month prep
1
key promotion
Why this matters for owners
Buyers will see the risks that you have not fixed yet.
If you are still the person solving the hard problems, approving the important decisions, managing the team, and holding the financial story together, buyers will hesitate. They may still make an offer, but they will protect themselves through a lower price, more structure, longer transition period, or tougher diligence.
In this case, the owner did not need to grow EBITDA to 1.8x his exit valuation, he just needed to reduce the risk for the buyer.