2nd Update on Carpet Cleaning Company Acquisition - Verbal Offer Accepted!
Discussion with Our Partners on the Counter Offer
After receiving the counter offer from the sellers, we had a brief chat with our partners. We came up with a couple of additional scenarios below…
We offer to purchase the van for them, inject our new organic marketing strategy, recruit a new manager, and put in brand new systems.
We partner with Steve and open new locations with an equity earn-in scenario with any net new business we’re able to bring in.
Reconnected with the Sellers to Present Alternatives
We got on another call with the intent of presenting the alternatives, but after chatting briefly about the deal beforehand, to make the deal less complex, we decided to go back to the $100k downpayment deal first and dive a bit deeper into why it’s the best choice.
We reiterated that the $100k would be non-recourse and even though they were giving up 10% phantom equity, that would make up for 33 months of lost net profits.
Their 7 month target was overcome because we told them it would actually be a greater benefit to them if the pre-acquisition deal scenario dragged on for longer since they would be capitalizing on the 50/50 split of the additional profits above and beyond the baseline $29,167/mo net profit.
By growing the company by optimizing certain processes and making it more profitable, it would be much more favorable for funding success through the SBA.
Reiterated the goal of having the two owners get out of the day-to-day operations as fast as possible by replacing them with a new manager and maybe a combination of an admin/VA/AI. They would only be responsible for helping to train, transferring all the operations and systems, and be available as needed until full acquisition.
They also really like the fact that our goal was to take their current team and offer them growth opportunities. A strong team matters, so our mindset is to always look after the people within the company first.
Verbal Offer Accepted & Preparing to Draft Up a Formal Offer
We’re going to have a chat with our other partners to tell them the awesome news, then we’ll have to connect with our due diligence team and draft up an LOI.
Stay tuned again…
