Wow! Thank you so much.....so many replies with important comments and insights. Thank you so so much!
A quick summary of the great points, and some answers to some of the questions:
Am interested in this business because it's very profitable, and because we want to move back to Ontario (where the business resides) in a rural area where there simply aren't jobs for my previous profession. I ran a large company for 20 years that required similar fundamentals as the scrap business..... but am obviously green going in.
The motivation of the owner to sell is retirement
References have been completed...especially the long term key accounts
Zero emotion process so far......although I really love anything to do with recycling.... it's redundant as a most of my time is on identifying the risks versus the positives. This company is oddly consistent with respect to EBITDA etc.
The 20+ year GM will continue to manage the operations, so thankfully there will be some real experience retained in the company from day 1.
I will be indemnified from any past or future contamination costs etc. (a pile of legal stuff, won't even try to explain)
The owner will finance a large enough portion of the company to be equally as motivated to ensure the transition is successful, and contractually committed to provide consultant support for 6 months.
Having read the great inventory comments.... am in the process of fine tuning the contract to make absolutely sure the inventory value is "net" which should mean, at the very least, I don't eat any variances related to shipping/market etc. (Contractually, the working capital included in the sale is set at an exact dollar value.... (Inventory, AR, Etc.). If I understood the feedback properly a front end assessment will simply have more risk..... If I can focus on "net value" and possibly incorporate a portion of the purchase as a hold back pending a reconciliation based on it's actual sell price it should de-risk. Will takes some shuffling and sorting..... but maybe the only way to assess the yard? If that isn't possible... will definitely pursue a X.X% less than current market value to retain enough of a margin to retain value obligation.
Thanks again! It's great to see such an active community of members giving so much to this forum.
Am very very grateful
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