A private equity firm is eyeing my business, offering €2,400,000. Currently, we’re pulling in around €1.2 million, with a tidy 25% profit margin. As an apartment block management firm, I began this venture in 2019 at 21 as more of a side gig, never anticipating it would grow to oversee 1,200 units. It’s pretty surreal. I started with no capital, and all four of my staff, earning €30k annually, were trained by me. Now, facing this private equity proposition, I’m a bit in the dark. Any tips for a first-timer in dealings with a PE company?
Creating a throwaway account for personal reasons.
What’s your growth perspectives like? And how certain are they?
Like other said, it seems to be a super generous offer, however - if you have contracts in place to expand the business significantly, maybe that’s not the case.
In a 2 minute DCF (4% growth a year, 2% terminal growth, 15% wacc, no idea if any of these numbers are right), your value is just $2,300 (5 year dcf assuming NI = CFC, like I said super simple). which means you make a profit.
BUT if you do have those contracts in place, things might be different.