Yes, especially if you believe your business will rebound in the next 1-2 years to pre-2020 revenue and EBITDA levels. Private equity firms exist to deploy capital and acquire and grow companies, and they begun to embrace alternative approaches to valuing businesses. Some are valuing businesses based on 2019 performance. Others are agreeing to contingent payments (earnouts) when the businesses they acquire bounce back from 2020 lows. In fact, if you’re struggling to find labor to fill orders, selling your business may provide you with additional resources or additional manufacturing sites to move the work, thereby accelerating the recovery of your business.
Not necessarily. Acquisitions often include additional purchase price – known as an “earnout” – paid to sellers if the acquired business grows in the future,