so realistically a good place to start would be 3 x EBIDTA, x his percentage of
shares (18% i think), and that is probably the most you'd offer ?
----- Original Message -----
From: Chuck McCown
To: af@afmug.com
Sent: Wednesday, April 13, 2016 10:40 AM
Subject: Re: [AFMUG] shareholder value
1.5 or 2x revenue has been around for as long as I can remember for any
company. But it is totally bogus. I suppose if you have net earnings of 50%
then 1.5 x revenue would be EBIDTA x 3. But how many businesses have a net of
50%? Hopefully all of them but in reality most have far less.
From: Josh Luthman
Sent: Wednesday, April 13, 2016 9:32 AM
To: af@afmug.com
Subject: Re: [AFMUG] shareholder value
Everyone's always said 1.5x annual revenue around here. I don't know how or
why that started, but that answers your question.
Josh Luthman
Office: 937-552-2340
Direct: 937-552-2343
1100 Wayne St
Suite 1337
Troy, OH 45373
On Wed, Apr 13, 2016 at 11:23 AM, Travis Johnson <t...@ida.net> wrote:
Hi,
I'm not sure where you got the 1.5 times revenue number. Every single
company I have invested or purchased is based on their EBIDTA number, not
revenue. Generally I am around the 3x annual EBIDTA.
Travis
On 4/13/2016 9:14 AM, CBB - Jay Fuller wrote:
�
Good morning -
�
Today we received notice at least one of our shareholders wishes to share
his stock.��
We have another shareholder who is the widow of one of our founding
members who also should probably be considering selling - although she is not
really thinking about it.� We do not know any of her relatives (nephew?) who
would likely be the heir to her stock.� Her age is currently 81 I believe.
�
I know the "ongoing" value for a company is generally 1.5 times annual
revenue, but the true value of what a company is worth is what someone is
actually willing to pay for the stock.
�
Per our bylaws, the company has 30 days to make an offer before the
stockholder hits the general market.
�
What advice can you give as to what kind of offer the company should give?
�
The stockholder likely does not know what the "market rate" is and very
likely the market rate is not the same here in the deep south.
�
I am also curious as to what your thoughts may be on how the stockholder
may try to sell his stock on the open market.� I feel sure it would not
consist of a classified ad in the local paper. :)
�
Thanks in advance.
�
�
