You’ve Been Served: Buying a $1.3m Process-Serving Company

So how, once you guys agreed that you should explore him selling to you, how did you negotiate? What did that look like?

So I kind of knew how the company was performing financially. I asked him for more detailed financials, and he was more than happy to provide them to me. We came to an agreement on valuation.

And typically, companies of this scale don't sell at more than 3X. But there was another deal that was pending for him, for which they had come to a... They kind of had verbal agreements, not really under LOI yet.

But... He showed me some emails that they'd been sending back and forth, and what they were offering him was a 5x multiple with a little bit of it in earn-out and a little bit of upfront cash, but they expected him to stay with the business. I offered him a 4x multiple, structured favorably and de-risked for both of us at $1 million. And I just got him the LOI first, and he accepted.

Okay, great. Is there the other company that was interested in purchasing and acquiring this business? Should I read into that? Is this a market where there's activity that people are interested in buying these types of businesses?

Or was it purely a strategic or a company, just a one-off company that happened to buy his company at the same time?

So we're currently in a place, I think, very early on where there's an increased amount of activity in the private equity and strategic space for some of these smaller private service or process companies. I think that that interest is just now heating up. I strongly believe, honestly, that...

Legal services and litigation services is going to be the next target for roll-ups and private equity and consolidation because it's a highly fragmented industry. Most of it is just mom and pop shops. There's really not a lot of big players in the space.

I mean, you have Proof, you have ProServe, you have ABC Legal that are some of the big names, but I'd say 90% of the industry is just mom and pops running around serving papers. Yeah.

What do the following Acquiring Minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shaw, Shane Ersam. They all went through the Acquisition Lab, the accelerator and community for people serious about buying a business.

but they represent just a sliver of the lab's success stories. The number of deals across the lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business.