How Large of a Company Can you Buy?

09/07/2024 37 min Episodio 185
How Large of a Company Can you Buy?

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Episode Synopsis

How large of a company can you buy?Let’s assume you’ve found a company that’s a great strategic and cultural fit.Can you speak to different acquisition types? For example, tuck-in, platform, or merger?What key metrics should you consider in the evaluation of the firm? (Revenue, EBITDA addition, growth rates, Return on investment)What’s the general guidance of how large a firm should be compared to revenue? (.5 to 2X revenue)What type of debt ratios should you consider?How do future earnings / cash flow considerations play in the size of a deal?If it’s a larger firm, how do you approach integration of the firm differently?Is there a quick formula that helps determine the rate of return for a firm or how many years are needed to receive a returnShould you buy the biggest firm you can? (Discuss a small deal is as much work as a large deal)If you are buying a firm that’s bigger than you, how do you approach integration differently?How does working with a funding partner, like a strategic PE firm, change the size of deal you should consider?
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