Most of our best work is a deal that never closed.
Real engagements, anonymized. Client names, brokers and identifying details are withheld — every one of these companies is either still trading, still in process, or owned by someone who did not ask to be written about.
The sellers demanded all cash. We made the cash work for the buyer.
Two related companies — a freight brokerage and an asset carrier — with combined revenue around $15.8M. The sellers refused rollover equity and demanded an all-cash close. That is the moment most buy-side advisors either lose the deal or let the buyer overpay for the privilege of keeping it.
We restructured the letter of intent instead of the price. The companies would be delivered with their cash in bank and their receivables, and free of all debt and payables — sellers settling those from proceeds at close. We set a minimum delivered cash-plus-A/R peg with dollar-for-dollar downward adjustment, so the buyer could not be handed a stripped balance sheet. We added an earn-out tied to combined gross profit against the prior year over 24 months, and an indemnity escrow held for twelve months.
- The read
- When you cannot move the headline number, move everything underneath it.
- The call
- Sellers got the all-cash close they demanded. The buyer got a working-capital floor, a contingent piece and a claims reserve.
- The lesson
- Price is one term. Peg, earn-out, escrow and what the balance sheet looks like at close are four more, and they are usually worth more than the price.
A carrier claiming a 24% EBITDA margin. It had lost money for seven straight years.
A family-owned refrigerated truckload carrier came to market through a broker with an adjusted EBITDA figure that implied a 24.1% margin. In truckload freight, that number should stop you cold — it is roughly triple what a healthy asset-based carrier earns. The seller wanted five to six times that figure, plus the real estate on top.
We pulled seven years of financials. Cumulative net income was negative $7.2M on $223M of revenue. Revenue had fallen 35% from its peak. Sixty-three percent of the tractors were past 500,000 miles, which meant the entire replacement cycle landed at once — a catch-up capital requirement in the millions that appeared nowhere in the seller's model. And the company was factoring its receivables, which for a business claiming that margin is a contradiction: nobody sells their invoices at a discount when they are earning 24 points.
- The read
- The adjusted figure was not earnings. It was the gap between what the company made and what the seller wanted.
- The call
- Our internal valuation range topped out far below the ask. We recommended against proceeding on the seller's terms.
- The lesson
- Factoring on the A/R of a high-margin business is one of the cleanest tells in the industry. Margins that good do not need to sell their invoices.
The adjusted EBITDA was mostly adjustments.
A platform acquisition inside a multi-entity roll-up arrived with an adjusted EBITDA figure several times what the business could actually show. We traced every adjustment back to source. Most of the adjusted figure turned out to be adjustments — and the bulk of those were projected cost savings the buyer had not yet made, in a business the buyer did not yet own.
That distinction is not academic. Lenders size facilities off EBITDA. Purchase prices are struck off multiples of EBITDA. Underwrite off the adjusted figure and you buy a company at a multiple of earnings it does not have, while borrowing against a number that does not exist.
- The read
- Projected synergies are the buyer's work product. They belong in the buyer's business case, never in the seller's price.
- The call
- Do not underwrite off the adjusted figure. The deal was re-priced and restructured against verifiable earnings.
- The lesson
- Ask one question of every add-back: can you show me the bank statement? Most of them end there.
We told a buyer to walk from a $52M company. He thanked us later.
On paper it looked like scale: a carrier annualizing toward $52M in revenue, roughly breaking even, with a large asset base and a seller offering to finance 80% of the purchase price. Owner financing at that level is presented as generosity. It is usually a signal.
Diligence found negative $9.67M in equity, a fleet already partially repossessed during the current year, 149 driver terminations in five months, and fatality-claim exposure that had not been disclosed. The CIM did not tie to the financial statements — not a rounding difference, a reconciliation failure.
- The read
- A business being handed over, not sold. The seller note was the seller's exit from personal liability, not a vote of confidence.
- The call
- No LOI. If pursued at all, an asset purchase of specific units only — never the entity, never the liabilities.
- The lesson
- Driver churn at that rate is not an HR problem. It is the business telling you what it is like to work there, and customers find out before you do.
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