Hitting the forecast is the #1 most important thing in selling a business. No doubt. I used to believe in the sellside QofE in founder owned businesses and now I don't. Here's why: Sellside QofE providers will put literally anything into a QofE if there is any evidence or argument they can make. And I mean anything. Founders often get confused in this process. They think they are negotiating with the QofE provider and getting more EBITDA and a higher value. But the provider is literally just doing whatever the seller wants who is paying their bill wants. The banker should push back hard on this but most don't the often the founder won't listen. An accounting firm says this is the number! They then send out books on this inflated EBITDA and get high bids. Once the buyers see the QofE most fade away and for the rest the value drops. The seller has all of these high bids and by this time has convinced themselves that their business is really worth this. Deal blows up. Seen it time and time again. PE does the sellside QofE because we get the game. Be a bit aggressive in the QofE knowing it will get cut back a little bit maybe. Disclose everything so there aren't surprises. It works well to speed up the process. Had a founder owned QofE earlier this year. The banker said it was $7M. When we got the QofE the real number was more like $4-5M. You can't add back factoring costs unless you are going to treat the balance as debt at closing. This is basic corporate finance. You can't add back the whole family management team and claim the business can run on its own. Etc. Etc.

Oak Hill Capital to acquire Guild Garage Group in $800 million-plus deal, sources say reut.rs/47dOBoI reut.rs/47dOBoI