The Deal of the Century
After a great 25(+) year run, the founder/owner of this very successful West Michigan landmark café and full service restaurant has some health issues which require him to sell his business – now.
Here’s what he has for sale and the terms of a deal he is prepared to offer a solid candidate:
- His establishment has annual revenues year after year of $2,000,000 operating out of a 3,000 square foot building and without a liquor license.
- SDE (the historical cash flow available to pay the new owner and service debt) has averaged $343,000 over each of the past five years.
- The books are squeaky clean, and there are no addbacks on the SDE compilation.
- The seller owns the real estate on which he will offer the buyer a favorable triple net annual lease for $39,000 which is less than 2% of revenues.
- The seller will also offer the real estate for sale in a separate transaction for $375,000
- Key managers are in place and will stay for the new owner
- The business is priced at $943,500 which is a 2.75x multiple of SDE ($343,000 x 2.75)
Now here is where it gets really interesting:
- For a qualified buyer, the seller will offer a 91% seller note – that’s right with an $85,000 cash down payment the seller will carry an $858,500 seller note. No banking necessary on this deal.
- Terms would include a 7.0% interest rate and an eight (8) year amortization; i.e. 96 equal monthly payments of $11,600 ($139,600 annually)
- So, with an average annual SDE of $343,000 and annual seller note payments of $139,600, the post debt service annual free cash flow for the buyer is $200,000. And remember, there is no banking.
To learn more about this extraordinary business opportunity, please contact Mike Greengard or better yet, please download from our website the NDA and buyer profile and email them directly to Praxis Business Brokers. Interested parties must submit both documents.