While we believe that no perfect company exists, we are searching for an acquisition with a clear competitive advantage in its industry. These advantages allow us to grow an already-successful business for the long term.
We have decades of experience leading companies in a variety of industries, so there is no single type of company we are looking to acquire. However, we do have the following criteria which allow us to be successful in continuing a seller's legacy.
SIZE: $2M - $6M CASH FLOW
We are fairly flexible in our preference of the size of the company we're seeking to acquire, but we generally target companies with annual cash flows, or EBITDA, of around $2 million to $6 million. More or less than that is still of interest to us.
We are confident in our ability to grow established businesses. Our experience and success in buying and operating businesses has taught us that profitable businesses are the best natural path to growth. Because of that, we like to see positive cash flows rather than turn-around opportunities or start-up's.
This is where we get a little bit picky. Our not-so-secret recipe for success is targeting businesses that have predictable, stable sources of revenue. Recurring revenue can come in many forms. It doesn't have to be contract or subscription based, but companies with products or services that naturally bring back the same customers are a great opportunity for us to generate long-term growth for a company.